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United Kingdom

Both the home and export markets for recycled metal have endured some substantial downward price movements over recent weeks. The bearish markets have evolved as a consequence of Turkish finished product prices, which have been slipping almost daily as demand seemingly slows. Since the beginning of March, Turkish finished rebar has fallen by almost US$ 100 per tonne, with Turkish hot rolled coil down by around US$ 135.

These falls have reverberated around the recycled metal markets as consumers seek lower-priced raw feed. In the UK, the deep-sea bulk market seems to have been the forerunner, dropping by around 20% in the last few days, with UK consumers and container destinations aligning their prices to more favourable terms (down around 12%). Amid these daily declines and the shortage of available material, trading has been somewhat strained in recent days. The market outlook is probably going to continue bearish in the short to medium term, although the shortage of material will be pivotal to a correction at some point. The question is when and at what level merchants and consumers can agree terms. As one merchant commented the other day, the price is almost irrelevant at present because material availability is so indifferent.

The containerized market is now more competitive than in recent months, especially for good-quality material, with letters of credit opening up once again in Bangladesh and more recently Pakistan along with more favourable freight rates. This has seen a reverse of the situation described in the previous report, with quality containerized material now being the preferred facilitator price-wise and volume-wise over the larger-volume bulk deep-sea destinations.

With global energy prices and inflation still impacting suppliers and consumers alike, trying to accommodate higher production overheads with a diminishing infeed is still a major concern for many UK metal merchants.

UK steel mills are continuing to secure all their domestic recycled raw material needs, albeit at lower levels. However, the export market remains the major outlet for recycled raw materials in the UK, the largest exporter by country within the European zone.

Along with material shortages, UK merchants are continuing to endure a lack of available staff as well as high energy and inflationary costs. Although latest data from UK government sources indicate better inflationary forecasts, the UK rate remains above 10%.

The continuing uncertainty surrounding the situation in Ukraine, elevated energy/labour costs and fears over the global economy and financial markets are all having an impact on sentiment.