Though highly transmissible, the Omicron variant has not brought about a repeat of the high number of hospitalisations seen in previous COVID waves. Therefore, the UK has modified most of its restrictions and has lifted the majority of the extra measures introduced at the back end of 2021. However, shortages of labour in the general economy owing to reduced but ongoing self-isolation rules is proving testing for both the public and commercial sectors. The knock-on effect of these staff shortages is impacting most supply chains - including, to some extent, the supply of secondary raw materials, with most UK metal recyclers citing lower activity levels.
Domestic and export-destination steel mills are under pressure from suppliers to raise their prices for available secondary raw materials, which has culminated in a stalemate between consumers and sellers. Exchange rates and high energy costs are impacting the entire supply and steelmaking chain. This market situation, coupled with concerns over higher inflation (which is at 5.4% in the UK, according to latest official figures), has dented normal early-year trading levels.
Nevertheless, at the time of writing, negotiated deals are emerging at improved levels in Turkey and notably in Egypt on higher billet pricing. Attention would now seem to focus on the finished steel sector to see whether higher prices and a greater appetite evolve into a spurt in daily raw material buying. For other available worldwide destinations, container freight rates are impacting the bottom line that merchants can achieve ex-yard. However, it is expected that these markets will once again emerge on the back of improved sentiment and activity with largest buyer Turkey.