Italy’s scrap prices set to decrease in June

Friday, 25 May 2012 17:45:00 (GMT+3)   |  
       

According to the latest information collected by SteelOrbis on the Italian domestic scrap market, quotations have been following a sideways trend compared to the last update on May 14, remaining at the levels below:

Quality

Average price

€/mt

$/mt

HMS I/II 80:20

310

388

Shredded scrap (E40)

340

425

Busheling (E8) / (E8C)

330-345

413-431

*Prices are for delivery to customer and exclude VAT

SteelOrbis' sources talk about a difficult environment in the Italian scrap market, with price negotiation activity intense because, as shown by the latest figures provided by the Italian steel federation Federacciai, local EAF mills reduced production during April and it seems that no increases in outputs are likely in May. Meanwhile, supply has been tight for some months now due to reduced industrial activity, and for this reason scrap traders are unwilling to lower their offers on the spot market.

Some market operators state that in the beginning of the May the average market prices appeared to be improving slightly, but this optimism lasted only for a few days. In the following period, due to the deep crisis in domestic long steel demand and the consequent decrease in longs prices, scrap distributors started to fear that the stable phase of quotations witnessed in the last few months could cease in June. In fact, steelmakers are requesting more discounts than ever, and traders think that this time their requests may be motivated by the real need to enlarging their profit margins in the mid-term.

A further indicator of a likely scrap downtrend in the internal Italian market is the fact that the raw material is on average cheaper in the other EU markets (for all categories and in certain cases up to €20-25/mt). In this environment, scrap distributors must avoid ex-EU import offers being too attractive for Italian buyers, because if the reduced demand should turn towards European scrap, the Italian sellers will have to lower their offers further in order to regain former customers.


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