Local Italian scrap market continues its bullish trend

The bullish trend in the Italian scrap market has continued this week. Although demand for finished steel is still at a low level, scrap prices have risen further due to low availability and lower inflow of material from steel mills in southern Italy.

This week, local scrap prices have seen a further €5-10/mt increase from last week. One source commented, "Steel mills are trying to keep their yard stocks at good levels and have resumed buying" even though demand for finished products is far from improved. The scarcity of available scrap has been driving prices up and, as a result, "those who need material are buying at higher prices,” the source added. There has also been less inflow of scrap from southern Italy, especially shredded scrap and HMS; in fact, due to local transportation price increases, the material is no longer competitive for traders and steel mills in northern Italy, and tends to be sold locally or is destined for the export market.

On the export side, prices on FOB basis are reported to be in line with domestic prices.

Expectations for the coming weeks are uncertain. On the one hand, several sources expect further increases for November and December as scrap continues to be in short supply, which will continue to drive prices up. On the other hand, some market players believe that prices will stabilize due to major production halts planned by several Italian mills for December.

Prices include delivery and exclude VAT.