At the start of June, local Italian scrap quotations indicated minimal changes compared to one month before. The price trend has been stable, as shown in the following table:
Quality |
| Average price | |
01 Jun (€/mt) | 01 Jun ($/mt) | 27 Apr (€/mt) | |
HMS I/II 80:20 | 305-315 | 378-391 | 310-320 |
Shredded scrap (E40) | 340-345 | 422-428 | 335-340 |
Busheling (E8) / (E8C) | 330-345 | 409-428 | 330-345 |
*Prices are for delivery to customer and exclude VAT
Market players contacted by SteelOrbis state that the market is clearly headed downwards in June, although the price decrease will have to cope with tight availability of raw material. The first monthly contracts for June deliveries have been inked with €5-15 downticks compared to one month ago, even if the situation is characterized by significant variety.
Strong tension has appeared between suppliers and buyers on the spot market. In fact, scrap traders may accept reduced earnings in line with steelmakers' needs but it is still uncertain how the situation is going to evolve during the rest of the month on the spot market. Most likely, the fall in scrap quotations will not be superior to €5-15/mt if the demand level does not decrease from current levels and, even if this should happen, tight supply will provide firm support for prices. Moreover, the recent earthquake and tremors in northern Italy shook an important industrial area, where scrap collection activity is intense and for the coming months it may not be possible to provide the usual scrap volumes.
In this environment, scrap suppliers aim at minimizing the price declines in June, while steel mills are looking forward to reduce production costs due to downtrending finished product prices and lackluster demand. On the other hand, the important thing is to avoid excessive reductions in scrap prices, as reduced offer levels could end up being harmful to the entire supply chain.