According to the latest monthly market report from Assofermet, the association representing Italian companies active in the trading, distribution and processing of steel, scrap and nonferrous metals, the Italian ferrous scrap market has remained broadly stable upon reopening in September, despite a clear gap between traders' expectations and the complex reality facing the industrial sector.
Local Italian ferrous scrap market stagnates amid sufficient stocks and caution
The current stability follows a particularly difficult July, marked by a sharp decline in demand from steel producers, which were affected by high production costs and weak sales of finished products. This resulted in price cuts of several tens of euros per metric ton. The resulting weakness in demand led to exceptionally prolonged summer shutdowns during August.
Between August 24 and September 7, Italian steel mills resumed operations with well-stocked scrap yards and adequate inventory levels. As a result, the first September negotiations reflect producers' intention to maintain pre-holiday prices. Although demand is slightly higher than in July, supply from scrap yards remains adequate and mills' existing stocks are limiting any upward price movements. There have nevertheless been some positive signals regarding the regularity of deliveries and dialogue between market participants, suggesting a focus on short-term operations rather than long-term forecasts.
As regards foreign markets, after the lows recorded in the second half of July, scrap prices began a slow recovery. Turkey led the trend, with increases of around $10/mt by the end of August and slight further gains in the first days of September, which are still being consolidated. The recovery has been supported both by a modest improvement in demand and higher freight costs.
Similar trends have been recorded in Asia, particularly in India. In contrast, continental Europe remains subdued: only Spain appears to have absorbed the price increases, while prices in southern Germany remain unchanged or have edged lower. For the remainder of September, global sentiment remains broadly stable, although possible changes in the second half of the month cannot be ruled out.
Stainless steel scrap - Indian demand offsets European weakness
In July and August, the stainless steel scrap market in Europe weakened further due to the collapse in European domestic demand. Despite a slight rebound in nickel prices at the LME in July, stainless steel scrap prices declined as mills showed little buying interest.
Exports to India prevented a sharp decline in European prices, as the country maintained steady interest and competitive prices. The beginning of September is expected to see a cautious recovery in Europe, where producers are restarting their plants without an urgent need to replenish stocks.
Pig iron - complete stagnation in Europe amid logistical and geopolitical obstacles
The market for refining pig iron remains stagnant, as was already the case before the summer. The contraction in demand, compounded by the crisis in the automotive and real estate sectors, particularly in China, is prompting steel mills and foundries to favor cheaper alternatives such as heavy melting scrap and DRI. In Europe and Italy, steel mills have adequate coverage through inventories and long-term contracts, leaving virtually no spot demand. Uncertainty surrounding the application of CBAM is also weighing on the market.
In foreign markets, higher freight costs have pushed CFR prices for Russian pig iron above $400/mt, for example to Turkey, bringing trade flows to a standstill.
For spheroidal pig iron, the sector's difficulties were compounded in August by Russian attacks on Ukrainian producers and the port of Odesa, bringing shipments to the port of Marghera in Italy to a halt. Meanwhile, the US market continues to exert strong buying interest, paying higher prices and diverting material away from Europe.
Ferroalloys - warehouses full due to safeguard quotas, India hit by CBAM
The ferroalloys sector is also showing a subdued autumn restart. European price lists are holding only thanks to high energy costs and higher upstream raw material costs.
Strong logistical and regulatory tensions are also being reported. Hubs in Rotterdam, Antwerp and northeastern Italy are saturated with material, particularly silicomanganese and ferrosilicon, stranded at ports while awaiting the next quarter due to the EU safeguard measures. The start of the financial phase of CBAM has almost completely halted imports of medium- and high-carbon ferromanganese (FeMn MC/HC) from India because of their high carbon footprint. In Angola, which has been identified as a transshipment hub for circumventing duties on Chinese production, new restrictions and duties have been imposed on ferrosilicon and silicon flows.
