The Italian scrap market has remained largely unchanged in terms of prices this week, as mills are still waiting for greater clarity on the international scene.
The high volatility of gas and energy prices, caused by the ongoing conflict in the Middle East, is generating great uncertainty for Italian steel producers, for whom it has become very complex to assess the impact of these costs on production. To further complicate the situation, finished steel demand is extremely low and based only on end customers’ specific needs, which are not sufficient to initiate a market recovery.
"Despite rising costs, scrap remains stable, and the reason is that there is no demand. But I guess it’s normal: no demand for finished steel means lower demand for scrap," an official at a major Italian mill said. "We can try to increase prices, but if the market does not provide any support, it will be of little use. We will only have to wait for the end of the geopolitical unrest to better understand how to proceed. We need to be very cautious," he concluded.
An Italian scrap trader also shared the same concerns: "Transport and energy costs have increased for us, too," he said. "However, we must absorb them internally, because our customers are not willing to pay. And I can understand them, because they have limited order margins. The scenario is tangled, and I am convinced that we will observe the opposite situation compared to the post-Ukraine war period: there will be a surge in costs, but not in revenues. […] In my opinion, the most appropriate approach now is to stop activities and wait to better understand what happens," he concluded.
As a result, the Italian scrap market remains stable due to a lack of agreements, low demand, and a widespread wait-and-see sentiment, also influenced by the immobility of international markets, particularly the Turkish one.
