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The new year did not start under the best auspices. The fall in inflation has not had the immediate response of a drop in interest rates, which is the main cause of the recession we are currently experiencing. Available quantities of scrap from new production are very small and, although demand from steel mills is not at its highest, the tension surrounding scrap prices is very high.

January got off to a very slow start, with work resuming on January 8. Scrap prices initially seemed to be on a downward trend, partly because there was not too much demand from steel mills - especially those producing long products, which seemed to be suffering from a lack of orders. Even flat product producers did not resume 100% melting activity.

Suddenly, the lack of scrap scared all operators a little and the price immediately rose by more than Euro 100 per tonne. Initially, scrap traders fuelled the price rise not by sales to be met but solely by the race to hoard material; in February, however, stainless steel mills also began to fear running out of scrap and started ordering more material, without recognizing the increase that the market demanded.

In contrast to February, March is expected to see a sharp reversal. Two factors are likely to influence an abrupt slowdown in scrap prices: strikes involving workers in the major European stainless steel mills, and massive imports of nickel pig iron from Asian countries. This is a clear counter-trend in terms of producing “green stainless steel”.