Local Italian scrap market starts to soften as holidays begin

As summer holidays start in the EU, local Italian market has started to soften on the lower end. “The recent rise was expected to be temporary anyways, this is not a surprise,” a source reported. Prices have declined by €15-20/mt over the past week. “The mills that are taking a break for technical maintenances or due to summer holidays are lowering their scrap procurement prices and finished steel demand is on the low side, but not all producers are following the same strategy,” a source commented, adding that the producers mentioned last week that received rebar demand are keeping their prices unchanged. Therefore, the scrap price range has widened week on week.

On the other hand, domestic scrap prices in Italy are expecting to move down during summer. Trading activities will slow down further in Italy during August and early September. “Some believe prices will increase after holidays, but I do not agree. Having moved up over the past months, energy cost in production has reached to €300/mt. This is not workable for all mills as demand remains on the low side, making an increase in steel prices hard” a source reported.

The negative factors mentioned by Italian sources are similar to other regions, high costs and energy prices, inflation, slow demand, pessimist expectations for Chinese growth and Russia’s ongoing invasion of Ukraine.

On the other hand, some players, mainly in the sellers’ segments, are stating that collection costs will not let them lower their prices by another €30/mt in line with mills’ requests. “We do not have the margins, and flow is very slow,” a source commented.

Currently, average spot prices in the local Italian scrap market are as shown in the table:

Prices include delivery and exclude VAT.