Local scrap market uncertain in Italy, but gradual increases consolidated

The local scrap market in Italy cooled down during the third week of March, in contrast to SteelOrbis’ report last week. Some mills have kept their scrap purchase prices unchanged on the local market, while others granted limited increases by €5-10/mt maximum. Scrap availability seems to be in slight recovery, but still not enough to compensate for the demand.

“Last week’s sentiments have been reversed, we are moving towards a slowdown. [Steel mills] realized that the scenario was too uncertain to grant the requested increases,” a local source commented. According to another source, there were rises only in case of real need by steel mills, or if large lots were purchased. Some others believe producers are already restocking in view of the stoppages planned for the Easter period, while others think that it is still too early to talk about it.

In short, the overall scenario is shaky on the local scrap market in Italy, but SteelOrbis considers that the upward trend is proceeding, slowly but gradually, and the peak should have – or at least almost – been reached. Most of the people surveyed by SteelOrbis believe that April will be stable, or that we will even see a slight drop in scrap purchase prices.

The availability of scrap is still scarce, although slightly improving, so much so that an Italian producer has preferred to buy from nearby markets such as Germany and France, where scrap flows seem higher, even if not much. Another major Italian steel mill has kept its purchase volumes unchanged and, all producers being active at the moment, the scrap quantity available on the local market is still not enough to cover the demand.

The latter, in fact, seems to be good, and it is triggering “panic buying” among traders who want to grab the largest possible quantities in view of the possible difficulties that Easter stops will bring. In spite of this apparently high demand, deliveries of scrap to producers’ yards are difficult, as various traders reported.

The production of finished steel, however, does not seem to have improved, albeit there were attempts to raise prices, especially for rebar. According to a major Italian scrap trader, this climate of contradiction represents a “continuous research for balance between increases in scrap prices and sales of finished products”.

Finally, according to reports, the purchase prices of scrap on the local Italian market have remained stable or have increased by €5-10/mt. In addition to the prices indicated in the table below, it should also be noted that shear scrap (E1) was reported in a range of €325-335/mt delivered to mill. Also it should be noted that peaks of €360-370/mt were reported for higher busheling qualities.

Prices include delivery and exclude VAT.