European steel and aluminium scrap markets softened in July. Weak summer demand from regional mills drove this trend. Severe logistical headwinds from historic low water levels on inland waterways also contributed.
Rhine Low-Water Crisis Constrains Scrap Freight
Inland navigation along the Rhine River has faced severe disruptions. Water levels at the critical Kaub gauge dropped to approximately 25 centimeters. Barges currently operate at only 30% to 50% of normal carrying capacity. Operators responded by implementing steep low-water surcharges. Industry participants report that spot freight rates on heavily affected Rhine routes have more than tripled since late June. These rates now exceed €100 per tonne on select movements.
Rail infrastructure remains constrained by maintenance backlogs. Road transport is economically unviable for bulk metal movements. Consequently, transport logistics emerged as the primary bottleneck for the physical European scrap trade. Secondary metal processors note that skyrocketing freight costs actively erode economic advantages. Using recycled scrap no longer offers clear cost savings over primary metal.
Steel and Aluminium Scrap Pricing Pressures
Fastmarkets assessments for European scrap reflected the downward trend in July. In Germany, E40 shredded steel scrap delivered to consumers fell to €320–335 per tonne. This represents a drop of €10–20 per tonne from June levels. E8 thin new production steel scrap was assessed at €330–340 per tonne.
Aluminium scrap markets experienced similar softening. Floated fragmentised aluminium scrap delivered to European consumers narrowed to €2,150–2,250 per tonne. Mixed turnings eased to €1,800–2,000 per tonne. Cast aluminium scrap declined at the upper end to €2,050–2,200 per tonne. Lower baseline scrap prices combined with escalating transport surcharges. This squeezed operating margins for secondary aluminium remelters and regional steelmakers.
Market Impact
○ Impacted Metals: E40 shredded steel scrap, E8 steel scrap, Fragmentised aluminium scrap, Mixed aluminum turnings, Cast aluminium scrap
○ Direction: Mixed
○ Time Horizon: Near-term
○ Affected Industries: Steelmaking, Secondary Aluminium Smelting, Metal Recycling, Inland Logistics, Manufacturing
○ Related Price Reports: Steel Scrap Weekly Price Report, Aluminum Scrap Weekly Price Report
○ Watch Item: Monitor rainfall patterns in Central Europe and post-holiday purchasing activity as steel mills and aluminium remelters return from August maintenance.
SuperMetalPrice Commentary:
The divergence between softening baseline scrap prices and surging freight costs highlights the acute vulnerability of European metal supply chains to environmental and infrastructure disruptions. If inland waterway levels fail to recover ahead of the September industrial restart, physical scrap availability at consuming mills could tighten sharply despite lower nominal market quotations.
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