In the first half of December, prices rose again by at least €10/mt ($13/mt) in the Italian scrap market after having moved sideways in the second half of November, while on the other hand long product quotations have failed to see an improvement. In this context, long steel producers' profit margins have narrowed to levels which are difficult to sustain.
Quality |
Average price |
|
Dec 17 (€/mt) |
Dec 3 (€/mt) |
|
Turnings (E5) |
275-285 ($365-378/mt) |
265-275 |
HMS (E1-E3) |
295-310 ($391-411/mt) |
280-300 |
Shredded scrap (E40) |
325-330 ($431-438/mt) |
310-315 |
Busheling (E8) / (E8C) |
325-330/335 ($431-438/444/mt) |
305-315/320-325 |
*Prices are for delivery to customer and exclude VAT
Market insiders consulted by SteelOrbis state that supply and demand for scrap in Italy are basically in equilibrium, while in the first half of December Italian scrap traders have benefitted from extremely low levels of raw material stocks in steel mills' yards. Accordingly, suppliers managed to ink supply contracts at higher quotations compared to the end of November. Moreover, although steelmakers earlier announced that in the last month of the year several cargos of scrap would reach Italian ports, this is reported not to have happened.
According to market operators consulted by SteelOrbis, the market has already closed for December as Italy's steelmakers are going to turn off their furnaces for at least a couple of weeks starting from next week and have already booked enough scrap material to reach the winter break. The outlook for the first half of January is positive, as eveyone in the market believes that scrap prices will rise in the first half of the month as happens every year. Meanwhile, market operators are more skeptical for the subsequent period. They state that they do not know what to expect starting from the second two weeks of January. It is clear to everyone that scrap quotations will not be able to remain at their current high levels if no uptrend is recorded in the long product market.
€1 = $1.326