Local Italian scrap market remains inactive, strengthening rumors of anticipated production stoppages

The Italian scrap market continued its inertial trend this week. Scarce scrap availability that has been going on for several months and a limited demand from steel mills is translating into a substantial price stability with some slight adjustments based on the needs of each producer.

Reliable sources from Italian steel mills have reported that they will keep their purchase prices unchanged in the coming weeks or will apply some slight reductions. "There is no foundation for raising scrap prices: rebar prices are not taking off despite the decent demand – especially in southern Italy – and there are too many uncertainties. I expect a decline in July, our yards are at a good level," a source told SteelOrbis. In the meantime, rumors of production stoppages as early as July are becoming more and more intense, although there are still no official confirmations. In addition, a national strike for the renewal of collective agreements is planned in the metalworking sector, tomorrow, July 20, and it is possible that protests will cause temporary stoppages to industrial production.

A slackening of the work pace has also been perceived on the scrap traders’ side, together with the awareness that an increase in scrap prices is really unlikely with the current finished steel prices. Indeed, a source reported that some producers have already implemented slight downward corrections in their scrap purchase prices this week, which, however, are the result of personal needs and do not significantly influence the market trend which remains stable overall. "Scrap prices should be rising, because there is a lack of material and steel mills are continuing to produce, even if at lower capacity," an Italian trader commented. Another trader agreed, adding: "and a decline is unlikely, because this would make finished product prices fall further. That’s not what producers want. Therefore, I expect a stable trend before the summer holidays, but it is still too early to make predictions. After all, there is still more than one month of production."

Local scrap prices in Italy this week are outlined as follows:

Prices include delivery and exclude VAT.

Finally, the sluggish mood also affected the Spanish scrap market. Domestic prices are stable with a slight downward trend, and a similar tendency is also reported on the import side.