Local Italian scrap prices fall, but negotiations remain few

The declines anticipated last week in the local Italian scrap market now seem to have materialized, although this is unusual before a holiday period. Scrap purchase prices have fallen by about €5-10/mt week on week for all categories, but trade has remained almost silent.

"Mills are beating around the bush. The declines are more theoretical than practical," an Italian trader commented. Producers have purchased low volumes of scrap, both from the local and foreign markets. "The month is already over," said a trader who sells German scrap to the Italian market. "The phone has stopped ringing," another agreed. Basically, although the month of April is only halfway through, most operators are already planning for May, as many of them will stop production starting from the end of the current week.

The declines may be due both to production stoppages and to the general bearishness pervading international markets. "Turkey is still absent, and this is not good for exporters," said one exporter, adding, "Maybe it's uncertainty about duties, maybe demand has actually dropped. Who knows. It's difficult to say in this situation." Certainly, the euro-dollar exchange rate is not favorable for exports, although traditionally the latter are not a significant market for Italy.

Most market players, however, believe that scrap prices in May will not record a further decline, but rather that they will be stable at these new levels. The prices of finished products in the Italian market recorded increases in the most recent period and it is unlikely that they would be able to maintain them if case scrap prices dropped on the cost side. "This is an apparent decline, perhaps due to the attempt to calm down a market that went too high in March and to be more relaxed before the stoppages," said an Italian steel mill official.

All this considered, the new scrap prices in the local market in Italy stand at the levels shown below. Bushelling scrap prices have also dropped by around €5-10/mt week-on-week however they are stable on the table below since levels obtained by SteelOrbis last week were lower than actual market prices.

Prices include delivery and exclude VAT.