On May 6, the Italian steel producers association Federacciai expressed its concerns about the rising prices of raw materials, in particular about the increases in iron ore prices and the new quarterly iron ore supply contracts. Federacciai said that this situation exerts a negative impact on the steel mills, which are unable to reflect the high costs on to the price of finished steel in the local market. The very high level of concentration of the seaborne iron ore market, which is dominated by just three producers (BHP Billiton, Rio Tinto and Vale) may result in irregular conduct, Federacciai said in its statement, remarking that, in this regard, the European Commission, notified by the European Confederation of Iron and Steel Industries (EUROFER), has launched an investigation about the problem in question underlining the importance of iron ore price competitiveness for European steel producers.
According to the statement from Federacciai, the rising costs of iron ore also boost scrap prices. In Italy a new situation is seen; the scrap needs of local producers always exceeded national production, and so the country has always been a net importer; however, now scrap exports from Italy to other countries, in particular to Turkey, are rising.
As regards energy costs, compared to other European countries, Federacciai said that Italy is at a disadvantage. In general, the association stated, all the European producers are at a disadvantage compared to other competitors due to the environmental policies applied unilaterally by the European Union.