Global scrap metal markets experienced a broad downward correction in July. Regional prices slid 2.5% to 8%, equivalent to $10 to $30 per tonne. This drop was driven by sluggish steel demand, summer plant maintenance, and persistent transportation bottlenecks.
Regional Price Trends Across Turkey, Europe, and Asia
The downward price momentum that began in June extended through July across major consumer hubs. In Turkey, benchmark HMS 1&2 80:20 import scrap prices slipped 2.5% to average $370 per tonne CFR. Turkish mills operated at roughly 60% capacity utilization. This kept purchasing appetite muted. A brief mid-month uptick occurred due to rising freight rates and tighter European scrap collection. However, trading activity stalled toward month-end. Steelmakers resisted higher costs amid weak rebar sales.
European markets saw steeper declines. In Germany, E3 scrap prices dropped 8% to $327 per tonne Ex-Works, pressured by an inland logistics crisis. Severe low-water conditions on the Rhine, Danube, and Oder rivers forced barges to operate at only 30% to 50% capacity. This triggered steep surcharges that complicated regional raw material flows. Italian scrap markets similarly faced oversupply and extended summer shutdowns.
In the United States, average East Coast HMS 1&2 80:20 prices decreased 5% to $328 per tonne. Weaker export demand to Turkey and scheduled mill maintenance weighed on prices. Conversely, prime grades like #1 busheling remained relatively resilient. This resilience was driven by domestic structural demand and robust data center construction activity. In China, average scrap prices also softened by 5% to $380 per tonne CFR. Cautious buying and sluggish end-user consumption caused this decline.
Logistics Disruptions and Inland Waterway Squeeze
The European scrap trade faced extraordinary physical hurdles in July. Water levels at the critical Rhine gauge in Kaub dropped to approximately 25 centimeters. This mirrored historic lows and drastically curtailed barge payloads. Recipient mills reported that transport surcharges more than tripled spot freight rates on affected routes above €100 per tonne. Rail networks were congested due to ongoing maintenance. Road transport remained unable to absorb bulk volumes economically. Consequently, freight availability became a primary bottleneck constraining physical deliveries.
Market participants issue a warning. Underlying scrap generation remains steady. However, the physical inability to move material could precipitate localized tightness. This tightness may occur when steel mills and secondary aluminum smelters resume full operations following August maintenance windows.
Market Impact
○ Impacted Metals: HMS 1&2 80:20 scrap, E3 steel scrap, E40 shredded steel scrap, #1 busheling scrap, aluminum scrap
○ Direction: Bearish
○ Time Horizon: Near-term
○ Affected Industries: Steelmaking, Secondary Aluminum Smelting, Scrap Recycling, Construction, Logistics
○ Related Price Reports: Steel Scrap Weekly Price Report, Aluminum Scrap Weekly Price Report
○ Watch Item: Monitor Rhine water levels at the Kaub gauge and post-maintenance purchasing activity from European and Turkish steel mills in September.
SuperMetalPrice Commentary:
The July scrap price correction reflects a combination of weak summer finished steel demand and acute regional logistics failures. While lower raw material costs offer temporary relief to steelmakers, severe inland waterway disruptions in Europe demonstrate that physical supply chain bottlenecks can quickly override baseline market pricing trends heading into the autumn restart.
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