Local Italian scrap prices largely unchanged, negative mood prevails

Although some steel mills have been buying at around €5/mt lower this week, local scrap prices in Italy have remained in the same range as last week. Market sentiment is negative and, while traders expect stable prices for June, producers are determined to obtain further declines in the coming weeks.

This week, local Italian scrap prices have remained at the same levels as last week: while some steel mills confirmed last week's prices, other contracts were closed at €5/mt less than last week. “The situation is not easy,” commented one trader who accepted the decreases proposed by the producers, adding, “There is a lot of competition in buying and collecting for traders. We have very thin margins.” The reason, again, is the scarcity of scrap available in the market, which, according to traders, has led to good demand for raw material despite the fact that steel mills are working at about 80 percent of capacity. Given the situation, traders expect stable quotations throughout June because, if scrap prices were to fall further, “it would create an imbalance because traders would offer lower volumes”, according to one source. Another contact agreed, stating, “We have closed monthly contracts and this confirms that prices should remain stable. Otherwise [producers] would have made them for 15 days.”

Producers, on the other hand, are planning to lower scrap purchase prices further in the coming weeks as they expect the finished market to deteriorate between now and the end of July. A steel mill official commented, “There is no market for finished products. Many are planning very long stops for August and maybe even earlier. Another €10 less could give us some breathing space’.

Prices include delivery and exclude VAT.

According to sources, local scrap prices in the Spanish market have remained unchanged this week even though one steel mill tried to lower its purchase prices. Demand is quite lively due to low energy prices and market participants do not expect any changes for June.

Prices include delivery and exclude VAT.