Further declines in local Italian scrap prices as holidays approach

The downward trend in local scrap prices in Italy has continued over the past week due to the impending production halts. In particular, prices have fallen by about €5/mt this week, marking an overall decrease of €10-15/mt compared to end-of-November levels. According to market players, most steel mills are not interested in buying scrap. “Christmas is just around the corner. The market is practically at a standstill,” commented one source, adding, “Scrap yards at steel mills are, on average, full and consumption is minimal, so they are not buying or are asking for reductions to receive new scrap. It will go on like this until the end of the year”.

As far as January is concerned, market participants are uncertain as to how the price of the raw material will trend. One contact stated that he does not expect further declines as production stops have been reduced to 10-20 days, depending on the producer, compared to the previously expected one month. Another factor to be taken into account, according to one source, is the recent rise in deep sea scrap prices in Turkey, which have now returned to above $340/mt CFR and may support Italian scrap prices again, pointing to a stable market in January. According to a steel mill official, however, further declines are possible in the new year. There is no positive news on the finished steel side. In January, steel mills will have their yards full and scrap dealers too. It all depends on how sales orders [for finished steel] will go, but we are not optimistic,” he said.

Prices include delivery and exclude VAT.