Further scrap and alloy surcharges observed from July to August

Do you ever feel like Bill Murray in the film Groundhog Day? Well here we are again, further scrap and alloy surcharges have been observed from global steel mills from July to August.

As we wince at the thought, we’ll try to keep this as brief as possible; the most significant increases consist of…….

  • Scrap surcharge which increased by approx. 5% from July to August. Scrap surcharge has now increased for 11 of the last 12 months. August marks a particular landmark as the scrap surcharge surpasses the £400/tonne mark.
  • Nickel surcharge has seen its biggest month-on-month increase of the last 6 months; an increase of approximately 7.5%. Mixed speculation exists around the nickel surcharge for the coming months; whilst some reports state a supply surplus driven by production output from South East Asia, others are citing increased demand for battery manufacture for the EV market could be causing market prices to start an upward movement.

These August increases from the mills are having the biggest impact on nickel based steels. 817M40 (EN24) & 826M40 (EN26) saw increases of approx. £40/tonne as a result, whilst the 655M13 (EN36) increase was just under £60/tonne.

Mill lead times for hot roll bar are now generally mid/end of Q2 2022; a lead time of up to 10 months in some cases. This contrasts with typical lead times of 3-4 months in a flat market. Lead times for forged bar are slightly better at mid Q1 2022 but still representing an extended position.

This is being driven by both increased market demand and continued speculative purchases as distributors and OEM’s alike focus on securing future supply.

Export easing policies from China and Russia are also driving an increased demand via European mills.

Needless to say we are all finding these times challenges. If you need a friendly Hillfoot arm around you to support or answer any questions, don’t hesitate to drop us an email or pick up the phone.

You can also click here to find out how the changes have affected the surcharge for specific steel grades.