Negotiations for monthly contracts in the scrap market in Italy are underway this week. According to sources, a higher-than-expected upward trend has been confirmed, with an average increase of around €10/mt for all scrap grades, although supplier requests were up to €20/mt.
Local scrap suppliers claim that the requests for such increases are motivated by the unchanged scenario regarding scrap availability in the local market and by the generalized upward trends at an international level. Scrap availability, in fact, still seems to be very scarce, especially for some categories such as new scrap.
On the other hand, however, steel producers are reluctant to grant such increases, because demand for finished steel is still low and prices cannot rise much further. "The situation is difficult in general, at a European level. Production costs, in terms of energy and scrap, have been high and continue to be high, and the finished steel products market is unable to absorb them. Margins are low," an official at a local Italian steel mill said.
Another major Italian steel mill confirmed that, although sales volumes in this first quarter were acceptable, they are working with very low margins. They hope that in the second quarter it will be possible to increase prices of finished products, at least partially.
All this said, there has been a lot of discussion about prices in the local Italian scrap market this week, but it still seems no significant movements or negotiations have been concluded. At a local level, the most requested quality is E8C, but price increases will likely affect all scrap categories. According to traders, at the end of the monthly negotiations the increases will be in the order of €10-15/mt, while according to steel mills they will not be over €5-10/mt.
For the time being, price ideas during negotiations in the local market are as follows:
| Quality | Average price (€/t) March 13 |
Average price (€/t) March 6 |
Average price (€/t) February 13 |
| Turnings (E5) | 315-325 | 295-310 | 295-305 |
| HMS (E3) | 335-345 | 315-325 | 310-320 |
| Shredded (E40) | 330-350 | 330-350 | 330-350 |
| Busheling (E8) | 345-355 | 330-345 | 330-345 |
Prices include delivery and exclude VAT.
As for the local scrap market in Spain, the trend has been very similar. Increases of around €10/mt are expected for all scrap grades, while in the import market the rises have already been confirmed: E1 stands at around €340/mt, E3 at around €360/mt and E40 at around €370/mt, up by €10/mt week on week. All prices are DAP, ports of northern Spain.