United Kingdom

Since the previous Mirror, the market has seen some substantial price movements - in both positive and negative directions. August saw an unexpected upward surge in prices, with steel mills and consumers actively pursuing furnace feed. Prices rose quickly during the early part of August, levelled off and then firmed again to peak some 16% higher, before slipping slightly in the final days of the month.

During the first week of September, there was more of the bearish sentiment seen in the latter days of August, bringing a sharp reduction in market prices offered for furnace feed - largely on intensified whole sector energy costs, which are seemingly out of control, and poor finished product price data. By the end of the second week, this had consolidated into a month-low 12% drop from the start of September before recovering 4% in the final week of the month as mills and consumers succumbed to the pressure of scarcer feed supplies.

UK merchants have also endured diminishing levels of yard infeed, current and projected higher energy costs, and currency turmoil - the last of these being a welcome leveller for exporters in recent days. During this unsettled period, the UK has seen a continuation of container activity as markets other than Turkey prove more fruitful. Indeed, deep-sea vessels are now being concluded at the alternative destinations normally accessed by the container markets, although how this will affect prices and flows remains to be seen.

As mentioned previously, the downside of such quick and hefty price reductions has been a slowing of material into many UK recycling facilities. Challenges for UK merchants include: high UK inflation, which is now reported at a staggering 10% and is projected to peak at 14% by the end of 2022 (the highest rate seen in 40 years); soaring energy costs; and a continuing shortage of skilled workers, many of whom are increasingly taking strike action as rising UK living costs bite ever harder.

The continuing uncertainty surrounding the situation in Ukraine, coupled with surging energy and labour costs as well as the UK’s latest recessionary indicators, render it unclear at present as to which direction markets will take. With so many global factors affecting market dynamics, reactive rather than predictive markets will continue to prevail.