Local Italian scrap prices stable, declines possible as production halts approach

Over the past week, local scrap prices have remained unchanged in Italy and trading activity has been rather slow. According to a trade source, scrap availability continues to be very scarce, but demand is also at a low level and it seems that most steel mills have withdrawn from the market, while those who were looking for material have preferred to hold back in order to avoid further price increases. “Some producers need raw material but want to keep prices stable, so negotiations have stopped,” one trader reported.

Steel producers, in fact, believe that scrap prices cannot rise given the continued weakness observed in sales of finished products. As anticipated last week, Italian steel mills will halt production in the first week of December due to the expected increase in energy costs, and some are planning to stop for at least three weeks from December into January. In addition, there are rumours in the market that several producers want to lower their scrap purchase prices starting next week.

The local Italian scrap market is, therefore, not expected to move up in the coming weeks, also in view of the widespread downward trend in the international markets. However, the outlook is uncertain. “It all depends on how production will go in December and how long the stoppages will actually be,” as one market participant commented.

Prices include delivery and exclude VAT.