After a long period of stability, the upward trend already announced in past weeks is finally materializing in the Italian scrap market. With mills working at high capacities, scrap demand stands at a good level, and, although the finished steel market continues to creak, scrap prices remain under pressure from cost increases and from the international markets.
According to scrap traders, the first scrap sales in May in the local market in Italy have been concluded with increases of €5-10/mt, with smaller mills pushing to secure volumes. Although some traders are showing enthusiasm for these price increases, others remain cautious, aware that the upward trend is "more outlined by higher costs than by a real improvement in market conditions".
From the first rumors, it also seems likely that there will be a new round of increases by €5-10/mt next week, leading to an overall hike of €15-20/mt in the first two weeks of the month.
Steel producers also remain cautious, and those who can afford it are trying to minimize increases in their scrap purchase prices or trying not to raise them at all. "The market is worried. Visibility is very low, and when this happens you have to stay quiet and try to make the best choice day by day. You must be extremely cautious, and it becomes very difficult - if not impossible - to make long-term plans. All our benchmarks are changing," a source at a major Italian producer said. "It's true we are producing at 80 percent of our capacity," another producer said, "but that doesn't mean demand is brilliant. Continuous production is a way to reduce costs and test the performance of our plants. However, I realize that my suppliers are also experiencing higher costs [such as logistics] and will probably ask for increases," the source added.
New local scrap prices in Italy are standing at the levels shown in the table. However, it should be specified that, within the HMS grade (E1/E3), E1 prices stand in a range of €295-305/mt delivered, while E3 prices are at €310-325/mt delivered or even higher for special grades. As for E8C, prices stand in the range of €380-390/mt delivered.
| Quality | Average spot price (€/mt) | Average spot price (€/mt) | Average spot price (€/mt) |
| Period | May 05 | April 30 | April 02 |
| Turnings (E5) | 300-310 | 285-300 | 285-300 |
| HMS (E1/E3) | 295-325 | 285-315 | 280-315 |
| Shredded (E40) | 340-345 | 325-345 | 320-345 |
| Busheling (E8) | 335-345 | 330-340 | 330-340 |
Prices include delivery and exclude VAT.
