Ferrous Scrap Supply and Demand to Take a Hit in 2020

The overall decline in steel production in Germany as well as the EU-28 countries has led to notable decline in scrap purchases by steel mills in the region.

SEATTLE (Scrap Monster): BDSV- the Germany-based steel scrap trade association noted that it is highly difficult to make predictions on ferrous scrap market recovery, as it depends largely on Europe returning back to normal operations, from shutdowns following Covid-19 pandemic spread. The ferrous scrap supply and demand has been badly impacted in the recent months, it noted.

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Commenting on the German ferrous scrap market, BDSV pointed out that the share of scrap used in crude steel production by the country has increased significantly from 43.8% in 2018 to 44.6% in 2019. Meantime, steel production has witnessed significant decline during the past year.

The overall decline in steel production in Germany as well as the EU-28 countries has led to notable decline in scrap purchases by steel mills in the region. The BDSV data suggests 6.2% decline in scrap purchases to around 13.7 million metric tons in 2019. Also, foundry scrap purchases recorded 9.2% year-on-year decline.

The widespread closure of automobile manufacturing facilities has significantly impacted scrap volumes.

The scrap sector recovery depends on how long it takes the manufacturing sector to resume normal operations. BDSV called for government financial aids programs in support of the troubled sector.

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