Another sharp rise in local Italian scrap market

Deals closed this week marked another €10-20/mt increase in local scrap prices in Italy. According to sources, the market is "under severe stress" due to scrap shortages and the ongoing demand from steel mills.

The bullish trend in the local Italian scrap market has gained further momentum this week even though there has been no real support coming from finished steel demand. On average, prices have risen by €10-20/mt and "continue to rise in each new contract" due to the scarcity of available scrap while at the same time mills need to replenish their years. One source commented, "The market is out of control. Prices are settled directly by traders with steel mills.” Indeed, it seems that there are no rules to govern the price trend except that “those who want a full yard pay more”.

As for exports, prices were in line with local prices until two weeks ago, but, given the recent developments in the local market and the sharp increases in deep sea prices in Turkey, sources expect price rises, although not as significant, even for exports, "if someone is willing to sell at this time of year".

Market participants continue to be divided regarding the short- and medium-term trends. Some steel mills have planned shutdowns for the Feast of the Immaculate Conception on December 8 and then from December 15, and, according to some sources, this should lead to a stabilization of prices for December. Other mills, on the other hand, seem intent on continuing production until Christmas Eve, thereby continuing to fuel demand for scrap and, consequently, prices. According to sources, it is therefore possible that prices will remain on an upward trend in December and that the trend will continue in January if supported by demand. Other traders, however, expect prices to fall in January.

Prices include delivery and exclude VAT.