After the substantial fall recorded in July and August, the Italian scrap market has not shown signs of recovery yet. Local players are worried most by the lack of prospects for the medium term and the risk of "a new 2008", with lots of operators postponing all investments and buys. The trend remains bearish due to low demand and the drop in international prices - HMS I/II 80:20 prices reached $200/mt CFR Turkey. According to sources close to SteelOrbis, there are no signs of possible positive changes and currently it looks like the situation could even worsen. Among the factors that adversely affect the market, there is still the low price of Chinese billets that are having a negative effect on the psychology of European steel producers, even if the volumes of Chinese billets imported in Italy have been low so far and the quality of such material has turned out to be below expectations.
The only bright spot in this scenario is the slight recovery of iron ore prices recorded in the past two months. However, such recovery seems short-lived. A few weeks ago Goldman Sachs said that iron ore prices will drop by 30% over the next 18 months, while Capital Economics indicated that prices could drop below $50/mt by the end of September and reach $45/mt by the end this year.
Returning to the Italian scrap market, local prices are now at the following levels, indicating a €45-50/mt decrease compared to the levels of middle July:
Quality |
Average price (€/mt) |
Turnings (E5) |
160-170 (181-192$/mt) |
HMS (E3) |
185-190 (209-215$/mt) |
Shredded scrap (E40) |
195-205 (220-232$/mt) |
Busheling (E8) |
195-205 (220-232$/mt) |
Prices include delivery and exclude VAT.
€1 = $1.13