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United Kingdom

The scarcity of available material for merchants is the prevailing headline at present, coupled with ever-increasing overheads such as: inflation, for which the UK rate has eased but is still at 6.7%; interest rates (the base rate is 5.25%); staff’s necessary wage increases to cope with the higher cost of living (average pay rises are reported to be 8.2%); elevated fuel prices that are forcing industrial plants into using fuel with hefty duty applied; and, although currently a little lower, high energy costs.

Together with the ominous legislation which will further burden the recycling business sector with unworkable environmental proposals for current metal processes, these factors are creating an increasingly tough landscape for metal recyclers. To keep abreast of the fast-paced changes being experienced and imposed, let alone the investment and necessary time to comply, the cost of producing furnace-ready material has probably never been higher. The impact of these costs is being exacerbated by the lack of available material, pushing up the overall per-tonne processing bill.

Conversely, since the previous Mirror, both the home and export markets for recycled ferrous metal have enjoyed a steady uptrend price-wise; this latest upturn reached its top at the beginning of October, helped mainly by more favourable exchange and freight rates, hence recouping 11% of the 12% it had dropped between its 2023 peak in February and current year-low in June. However, at the time of writing, prices are again softening both domestically and internationally, with consumers looking to lower prices by as much as £20 per tonne. This is meeting with resistance because of the lack of material and so settlements some £10 per tonne lower look like a more realistic outcome of current negotiations.

As previously reported, the slow demand for Turkish finished products has been a fundamental factor in the price offers being put forward by the country’s steel producers for furnace-ready material.
Available container destinations have continued to align their prices to more favourable buying terms. With the market outlook seemingly bearish in the short term, it is thought that the shortage of material may induce a further market correction in the closing months of what has been a testing year for metal recyclers.

Though the export market remains the major recycled raw materials outlet for the UK (the largest exporting country within the European zone), our own steel mills continue to secure all their domestic recycled material needs, albeit at lower levels.

UK merchants are still enduring a lack of available staff, elevated energy costs and high inflation; even though energy and inflation are lower than in previous months, they remain higher than they have been for many years.
The continuing uncertainty surrounding the situation in Ukraine, coupled with fears over the economy, are having an impact on the current economic climate and on market sentiment.