In the second half of October scrap prices have seen a turnaround in the Italian market. Steel mills' offers began to rise after the sharp falls recorded across Europe, from which the Italian market could not escape. According to the last price survey, low quality scrap prices showed more significant changes compared to the highest qualities:
Quality |
Average price |
|
26 Oct (€/mt) |
12 Oct (€/mt) |
|
Turnings (E5) |
240-260 ($307-333) |
225-245 ($293-319/mt) |
HMS |
270-285 ($346-365) |
245-270 ($319-351/mt) |
Shredded scrap (E40) |
295-300 ($377-384) |
280-290 ($364-377/mt) |
Busheling (E8) / (E8C) |
290-300 / 305 ($371-384/390) |
280-290 / 295 ($364-377/384/mt) |
*Prices are for delivery to customer and exclude VAT
The scrap prices sees a €15-20 ($19-26) increase compared to two weeks ago for the low qualities (turnings and HMS), while the high qualities (shredded scrap and busheling) grew by €10-15 ($13-19), according to quotations reported by SteelOrbis. A further slight decline may have occurred before the ascent, as sources indicate a €20 ($26) increase after a decrease amounting to a total of €40 ($51).
The price recovery is supported by several factors that are exerting an upward pressure. First, the fact that the decline in prices for October deliveries in all European markets has been very strong and fast: the price decrease hasn't been that rapid for years and the situation has been too difficult to be handled even by steel mills. Secondly, there are positive news coming from international markets. In the main EU markets (Germany, Spain, France) and also in Turkey, raw material prices are changing route, with a unison movement that can't leave Italy unscathed. Finally, it should also be noted that the short-to-medium term outlook for rebar prices is cautiously positive. In fact, the decreasing phase may have halted both in Italy and in Algeria.
Market participants are very uncertain about the sustainability of current rebound that will depend essentially on the increase in demand. With the general slowdown in the European countries, it seems unlikely that Italian steel produces will leave room for a strong price increase, as a real recovery in steel consumption (according to the latest estimates by worldsteel) is not expected until 2013. However, the beginning of November could indicate a positive trend for ferrous scrap recyclers.
€1 = $ 1.28