Negotiations in the Italian scrap market were initiated very early this week. In the wake of good scrap demand - especially from long steel producers - and of the increases observed in international scrap markets, the first scrap purchasing contracts in Italy this week have been closed at levels up €5-15/mt depending on the scrap categories and producers.
Scrap traders in central and northern Italy have reported that steel producers have been fairly willing to buy, and, contrary to what has been observed in other European countries, they are not struggling to find enough scrap volumes to meet their commitments. However, sources from the scrap selling side have also reported that, for the moment, negotiations have only been carried out for the purchase of moderate quantities of material.
Other sources in the flat steel production segment have confirmed that they do not have strong scrap needs, and that they are buying minimum quantities. They have also confirmed that they are receiving good proposals in terms of scrap volumes, adding that finding scrap is not the main obstacle at the moment, but rather the slowdown in the finished steel segment.
On the other hand, producers of long products with smaller warehouses have accepted scrap price increases by €10-15/mt proposed by scrap traders to cover their production restart after the winter break, although activities are proceeding slowly even in the construction sector, the main consumer of long steel products, in line with the cold season.
Compared to the latest levels recorded by SteelOrbis in the local scrap market in Italy, reference prices for the scrap categories considered have shown increases by €5-15/mt depending on the quality.
| Quality | Average spot price (€/t) | Average spot price (€/t) |
| Period | January 14 | December 18 |
| Turnings (E5) | 285-300 | 265-290 |
| HMS (E1/E3) | 285-310 | 270-305 |
| Shredded (E40) | 320-340 | 300-325 |
| Busheling (E8) | 330-335 | 300-330 |
Prices include delivery and exclude VAT.
In addition, €350-365/mt levels have been reported for E8C scrap. It should also be noted that, within HMS, E1 scrap prices stand at €285-300/mt, whereas E3 scrap prices stand at €290-310/mt. Prices include delivery and exclude VAT.
In the Iberian Peninsula, E1 and E40 scrap prices are in line with the Italian market, respectively at around €300/mt delivered and €325/mt delivered, respectively, whereas for E3 they have been reported at around €10/mt higher than the upper end of the range in Italy, i.e., at around €320/mt delivered. According to one source, steel mills in northern Spain are buying at an average of €10/mt less than mills in the south of Spain, as the latter are facing higher transportation costs.
