Local Italian scrap prices stable amid slow market, declines expected in weeks ahead

The local Italian scrap market has continued to see slow activity this week, but the first signs of a possible price drop in July are emerging. Although scrap prices have remained substantially stable this week, some producers have slightly reduced their purchase prices as they did not need to buy. Declines in finished steel prices and the approaching summer shutdowns with reduced demand for scrap will lead to a new decline in scrap prices.

"The rebar price has fallen again, so it will be necessary to lower scrap costs to recover some margins, as we are facing a significant increase in energy prices," an official at an Italian steel mill said. The same source confirmed that he expects scrap demand to decline next month, as it was necessary to cut production rates by around 35,000 mt. In the meantime, summer stoppages seem to have been clarified: several mills have confirmed that they will stop production activities from mid-to-late July until late August, while others will do so only in the usual middle weeks of August.

"I expect [scrap prices] to fall by at least €10/mt in July," said an Italian scrap trader, adding, "I am concerned, though, that scrap deliveries at mills’ yards will also be interrupted when production is idled, because this could greatly affect prices in September."

It is also worth mentioning that new scrap is abundant in the local Italian market, as demand for these categories is lower compared to old scrap, which is in greater demand due to its greater convenience in terms of pricing.

As anticipated, scrap prices in the Italian scrap market have remained substantially stable this week, as follows:

Prices include delivery and exclude VAT.