Italian scrap prices increase for some grades

After a rather slow start to the week, the Italian scrap market has recorded rather significant increases in prices of some scrap categories this Friday.

Although market players were expecting unchanged or slightly higher scrap prices in February at the beginning of this week, today, January 30, some scrap price increases by €10/mt week on week have been recorded for HMS. Significantly higher demand for busheling scrap, especially for E8C grade, has also been reported and prices for this grade have reached €360-370/mt delivered to mill.

"Steel producers are not very happy with these increases," an Italian scrap trader commented. However, "If production [of finished steel] continues at this pace, there will not be enough scrap for everyone," another scrap trader said.

Several scrap traders have in fact reported low scrap availability overall, although Italian steelmakers are continuing to partially compensate for their needs with imports.

Some sources on the producers’ side have confirmed the price increases for some scrap grades, while others have made clear that they are not willing to pay higher than their current levels. Although higher steel prices are being sought in the Italian longs market, it is still too early to assess whether end-consumers are willing to confirm orders at the new levels.

"Mills who had low warehouse levels have accepted [scrap purchase price] increases, but I expect that the market will relax a bit from now on, to see what happens in February," a source at a major Italian mill commented.

In light of the above, scrap prices in the Italian domestic market have settled as follows:

Prices include delivery and exclude VAT.

It should also be noted that, within HMS, E1 scrap prices stand at €295-305/mt, whereas E3 scrap prices stand at €320-335/mt or slightly higher. Prices include delivery and exclude VAT.