Local Italian scrap market stable, supply and demand at low levels

This week, local scrap prices have remained essentially stable in Italy. According to sources, in fact some steel mills lowered their purchase prices by  €5/mt, but contracts have been closed at unchanged levels. “Prices cannot drop because there is no scrap available. If they dropped any more, it would block flows,” said one trader.

Italian steel mills are planning three to six weeks of shutdowns this summer to cope with the very low demand for finished products. Consequently, the demand for raw material continues to be scarce and may even decrease. An official at one steel mill that will start its summer shutdown in the penultimate week of July commented, “Our yard is quite full and production is very low, so we will not buy any more scrap until after the holidays,” adding that he is worried about the shortage of scrap once mills resume production at full capacity. Traders will also take advantage of the steel mills' long breaks to carry out maintenance on their plants.

Prices include delivery and exclude VAT.

In Spain, local scrap prices continue to remain unchanged. There are rumours in the market that a major steel mill will attempt to lower scrap purchase prices by €10/mt next week, but market participants believe there are no supporting conditions as supply and demand remain equally tight and they do not expect further changes in July. Spanish steel mills have planned to shut down for an average of two weeks for maintenance works, some at the end of July and others at the beginning of August. Only a few small special steel producers will shut down during the entire month of August.

Prices include delivery and exclude VAT.