Italian scrap market stable overall, higher grades still under upward pressure

The local scrap market in Italy has been rather quiet this week, with mills trying to reshape the market scenario after the sharp increases previously recorded in January and February.

Scrap purchase prices have remained largely unchanged, with the exception of some busheling grades that have recorded further increases and on which the upward pressure has shown no signs of slackening.

Steel production continues at good capacity utilization rates, and scrap demand, especially for higher busheling qualities, remains high in the face of a shortage of supply.

In addition, a contributing factor to the upward pressure on these categories could also be the influence of CBAM, which is increasing uncertainty and the cost of raw materials such as pig iron and HBI, prompting Italian mills to look for cleaner material to be used in steel production.

A steel producer that has had good scrap stocks in recent months is waiting until the beginning of March to conclude new purchase contracts. However, he commented,  “Since I didn’t buy in February, I will have to accept a small increase.” Another Italian producer, on the other hand, foresees unchanged or slightly lower prices for March scrap purchases, but at the same time recognizes the upward pressure on prices of high-quality busheling.

“New scrap generation is decreasing both in the manufacturing and automotive segments - and not only in Italy,” an Italian scrap trader said. “I expect further increases for busheling in March, and stability for other grades,” said another. “The sentiment is tense, but the scenario is rather sluggish. Everyone is in wait-and-see mode,” a third trader commented.

Overall, scrap prices in the local market in Italy have remained unchanged week on week for the reference categories, whereas for busheling E8C and bundles some increases have been observed in some steel producers’ purchase prices.

Prices include delivery and exclude VAT.