In line with the recent forecast by Assofermet (association of Italian steel and ferrous scrap traders), the downtrend in the Italian domestic scrap market has switched increasingly to sideways movement. According to SteelOrbis sources, during the past week minimum quotations have not slipped further, while maximum levels have only recorded minor downticks:
Quality | Average price | |
06 Jul (€/mt) | 29 Jun (€/mt) | |
HMS | 270-285 | 270-290 |
Shredded scrap (E40) | 300-315 | 300-310 |
Busheling (E8) / (E8C) | 295-305 / 310 | 295-305/310 |
*Prices are for delivery to customer and exclude VAT
The end of the downtrend is not attributable to increased buying activity or to tight scrap availability, as currently offers and demand are well-balanced at low levels. Most market operators consulted by SteelOrbis believe that in the coming period prices will stand still, especially as the declines in traders' selling prices for scrap were not reflected in their purchase prices for the raw material.
Italian steelmakers can be satisfied with their decreases achieved in scrap costs in both June and July, while they avoided taking excessive risks in the current finished steel market environment. Nevertheless, scrap traders state that their customers are still cautious as regards buying activity and sometimes are postponing scrap purchases or are even seeking delays of shipments they have already booked.
The market is already in holiday mode. The Italian scrap market is likely to remain inactive during August, holding on for better steel market conditions in September. Early forecasts for the post-holiday period lack clarity: no one believes that scrap quotations will trend down further, but no one dares either to predict a decent uptrend. In any case, market players hope that any movement will happen gradually and not all of a sudden, as happened in June, so that the whole supply chain will share the benefit or the pain.