Local Italian scrap market stable, with rumors of increases

Although local prices in the Italian scrap market have remained largely stable this week, rumors of increases are already circulating among market participants. On their side, traders argue that the persistent lack of scrap availability will help boost such a trend, while mills believe that the low demand for finished steel and the forecast of rising energy costs could instead curb it.

According to some sources, Italian scrap dealers already foresee an increase in the order of €10-15/mt in scrap purchase prices by mills next week. "Production has resumed after the long interruption at the end of April-beginning of May, and now mills need to buy even if production rates are sluggish," said a source on the suppliers’ side. "If scrap continues to decline [i.e., continues the previous downward trend], it will be difficult for producers to be able to increase rebar prices," another source said, adding, "By now, the news of the [previous] decline in scrap prices has also spread among buyers and users of finished products."

On the mills’ side, on the other hand, a spokesperson from one of the largest producers in Italy said he would not take increases in scrap prices for granted. "The scrap price doesn't necessarily have to go up or down. It can also remain unchanged. Demand for finished products is sluggish, [longs] prices are falling, and clients are waiting for the end of the declines to buy. In addition - it is still early, but we need to start thinking about it - we are heading towards summer, when electricity costs will increase."

To sum up, scrap price increases are desired by traders but not granted by steel mills. So far, there has been no official confirmation of such rises, and therefore scrap prices in Italy remain stable at the following levels:

Prices include delivery and exclude VAT.