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In the second quarter, there has been a slight uptick in the price of scrap and a more marked sign of an increase for coils.

Although this last statement may seem to go against economic trends in Europe at present, the reasons behind these increases are easily identifiable. The supply of coils has weakened considerably in the last quarter owing to strikes that have effectively halved outputs of finished products. Finnish company Outokumpu has stopped production for 15 days while Spain’s Acerinox is in the midst of a tough industrial dispute which, at the time of writing, has yet to be resolved after almost three months. These developments have enabled Aperam and AST to secure a very large order book for the period.

Combined with weakness among long product producers and the continuous use of nickel pig iron, this has ensured no rapid rise in the price of scrap despite those holding material pushing for increases. Their case has been strengthened by the scarcity of scrap in the face of low industrial production and the significant recent increase in LME nickel.

It is not possible to say with certainty whether scrap and coil price increases can continue once all four producers return to normal; this is because, from June and July, the European market could be invaded by products from Asia.