The local scrap market in Italy has been quite tense this week. Producers’ purchase need has led to further increases of around €10/mt in scrap prices, while at the same time the finished products’ market is persistently weak in both longs and flats segments, respectively due to an excess of supply and to a lack of demand.
The overall scenario is one of "great uncertainty" among Italian scrap traders, who believe that a stalemate has been reached, and no further rises will occur after this week’s increase of €5-10/mt. The situation in the finished products market does not allow producers to increase their sales prices, which is why SteelOrbis believes that scrap prices will stabilize at the current levels. SteelOrbis also attributes the scrap price increase registered so far in the Italian market to a higher raw material demand which has not sufficiently been supported by supply. As mentioned in last week's report, in fact, the representative of an Italian steel mill reiterated that previous scrap prices made scrap collection almost impossible.
"We will have to go with the flow and play it by ear," an important Italian scrap trader commented. "I am worried, however, that mills are producing at a loss," he added. "This isn’t good for anyone."
Few comments arrived from the producers’ side this week, but the general climate that is perceived on the market is one of extreme cautiousness. “Everyone is waiting for the next one to make a move”, a source commented, and SteelOrbis believes that this uncertainty is also due to the misalignment between rising scrap prices and declining finished steel prices.
As far as scrap imports are concerned, especially from Germany, Italian mills have maintained their purchase prices stable for June’s round, in line with the trend that seems to be emerging these days in the local German scrap market. According to SteelOrbis information, in fact, European scrap markets are looking for stability, perhaps to compensate for the many variables at play.
Scrap prices in the Italian market this week are outlined as follows:
| Quality | Average spot price (€/mt) June 05 |
Average spot price (€/mt) May 30 |
Average spot price (€/mt) May 08 |
| Turnings (E5) | 285-290 | 285-290 | 300-310 |
| HMS (E3) | 290-300 | 280-310 | 315-330 |
| Shredded (E40) | 330-370 | 330-365 | 315-335 |
| Busheling (E8) | 320-345 | 320-335 | 335-345 |
Prices include delivery and exclude VAT.