The sharp decline in the Italian scrap market has been slowing down this week. Almost all mills have greatly reduced their stocks and now find themselves needing to restock even though the long product market is not in good shape. As a result, mills who have sufficient stocks have been able to adjust their purchase prices downwards by a few more euros, while producers with greater needs have slowed down the decline in their scrap bids. Scrap traders, in fact, have reported that - due to the previous declines - scrap collection has become harder, considering the modest scrap availability in the Italian domestic market.
"The market fundamentals haven’t changed," an Italian scrap trader reported. "I think the next few weeks will be quiet, but [steel producers] have made a mistake lowering [scrap purchase prices] so much, because [local] rebar is not following suit," he added. "Italian producers cannot raise rebar prices without increasing scrap prices," another Italian market player echoed. "The two factors are codependent: if one goes up, the other must go up too, and vice versa. The real problem is that the construction industry in Italy is not holding up at the moment, and the market had been greatly inflated by public financial support in recent years. In addition, new scrap generation is very low, because the processing of, for example, steel sheets, is more and more efficient and there is little waste. At the same time, there is no need to demolish buildings, so there is not much scrap availability," he explained.
Regarding the declines in scrap purchase prices, a representative of an Italian steel mill admitted that they had purchased scrap at gradually lower prices in the contracts they concluded from September to date. "We have full stocks. The problem right now is not scrap, but finished product sales, which are going badly," he commented. When asked about new European Union safeguard measures and the CBAM, he said that they are positive overall, but that more effectiveness is needed from the European Commission.
According to the information collected by SteelOrbis, scrap grades E1/E3 and E8 In the local scrap market in Italy have declined further, by about €5/mt, settling down at the levels below:
| Quality | Average spot price (€/mt) | Average spot price (€/mt) | Average spot price (€/mt) |
| Period | October 16 | October 10 | September 18 |
| Turnings (E5) | 255-285 | 255-285 | 280-300 |
| HMS (E1/E3) | 260-285 | 265-285 | 280-300 |
| Shredded (E40) | 300-325 | 300-325 | 330-345 |
| Busheling (E8) | 285-320 | 300-320 | 320-335 |
Prices include delivery and exclude VAT.
