As compared to early predictions by Italian scrap consumers association Nuovo Campsider and by scrap traders association Assofermet, local scrap prices in Italy are decreasing at a faster pace. While the downtrend in quotations is appreciable, the unwillingness of Italian steelmakers to purchase raw materials is the main worry for scrap traders. Current average scrap prices in the Italian market are as follows:
Quality | Average price | |
15 Jun (€/mt) | 01 Jun (€/mt) | |
HMS I/II 80:20 | 290-310 ($365-391/mt) | 305-315 |
Shredded scrap (E40) | 325-330 ($410-416/mt) | 340-345 |
Busheling (E8) / (E8C) | 315-325 / 330 ($397-410/416/mt) | 330-340 / 345 |
*Prices are for delivery to customer and exclude VAT
Early predictions stated that domestic scrap prices were set to decrease in June and reallign themselves with the European markets, also given the forthcoming production halts for the summer holidays. The low demand sensed both in the export market for ex-Italy long rolled products (expecially Algeria, where the approach of Ramadan has slowed the flow of new orders) and in the domestic steel market has caused Italy's steelmakers to reduce their purchases to minimal levels.
Despite tight scrap availability, in the last two weeks scrap prices have declined by €10-15/mt on average, and by up to €20/mt in the case of particularly large orders or in the case of long-time customers.
According to market operators, in June ex-France and ex-Germany scrap prices recorded decreases not exceeding €15/mt, and this is highlighted as the main factor dragging down the Italian market. In such a poor finished market environment, steel mills continue to wait further until prices decrease further.
In this context, SteelOrbis sources state that it is not unlikely that a further scrap price decline will be seen in the second half of the month, but hopefully even a slight increase on the demand side should stop the fall. Looking on the bright side, scrap imports from non_EU sources are close to being nonexistent as low demand in the finished steel market does not allow steelmakers to plan their feedstocks beyond one to two weeks and the Italian government has lately announced it has postponed the coming into effect of the electronic tracement system for scrap (Sistri), which would have represented a further complication in such a difficult environment.