In early February in the Italian market, there was a struggle between domestic steel mills and scrap suppliers. The mills' search for lower prices in line with the international trend coincided with lower scrap availability from suppliers in southern Europe and increased demand from some domestic and German steel mills. Scrap prices in the Italian market decreased by €5/mt ($5.3/mt) twice in two weeks, while monthly contracts from European suppliers showed reductions of €5-15/mt ($5.3-16/mt) depending on the end-users and the quality of the material. Sources believe it is important to specify that the reduced collection of scrap has not been caused only by weather conditions, but also by lower generation, especially in the case of lower quality materials. Some Italian producers such as Stefana and the former Lucchini plant at Piombino are still absent and so they are not consuming scrap. On the other hand, due to the decrease in outputs, availability of scrap remains sufficient even though it is not at high levels.
As for the current month, last week Italian steel mills managed to achieve a scrap price reduction of about €5/mt. This adjustment of domestic scrap prices was made in line with international raw material prices and also influenced by the performance of finished product prices and demand. According to sources interviewed by SteelOrbis, however, scrap prices are no longer decreasing in Italy, but they are going through a phase of adjustment. This is due to some signs of improvement in the global economy and in steel demand worldwide, but it is also due to the imminent end of the winter season and the recent slight rebound seen in steel and scrap prices in Turkey.
In addition, the strengthening of the dollar against the euro will help to stimulate Italian finished steel exports, thereby contributing to higher demand for scrap in Italy. According to the same sources, a small rebound in scrap prices in Italy in late March would not come as a great surprise.
Meanwhile, in other European countries such as Germany and France, scrap prices are expected to remain stable at the levels seen last month.
At present, scrap prices in the local Italian market are at the following levels:
Quality | Average price (€/mt) |
Turnings (E5) | 200-210 ($212-223/mt) |
HMS (E3) | 234-245 ($248-260/mt) |
Shredded scrap (E40) | 245-255 ($260-270/mt) |
Busheling (E8) | 240-250 ($254-265/mt) |
Prices include delivery and exclude VAT.