Scrap prices in Italy may reverse their trend next month

In Italy, local scrap prices should partially recover in November after decreasing by around €100/mt on average in September and October. This is the forecast of most market sources interviewed by SteelOrbis and is mainly based on the trend of global raw material prices, and also partly on the decline of domestic scrap suppliers' stocks. However, the upward trend may be mitigated both by the good scrap stocks held by local steel mills and by the slowdown in finished steel production due to high energy costs.

"Increasing import scrap prices in Turkey may suggest that there will be price increases [in Italy too], but steel mills in general have well-stocked scrap inventories," said the manager of one Italian long steel producer. "For the moment, it is difficult to make predictions. Now in the finished product market we are witnessing a partial recovery in prices due to the increase in costs. As far as scrap is concerned, however, no one has increased their prices yet, with the exception perhaps of those few steel mills that had decreased their purchase prices below the average levels," the source said, adding that there are no conditions for a return to the price levels of last June and July "either for scrap or finished products." Furthermore, in the short term, i.e., in the next two months, it may be difficult to see a narrowing of the gap between the prices of the higher and lower scrap qualities.

Finally, several market players said they are convinced that in the last weeks of the year local scrap prices will be supported by the fact that some traders, as usual, will hold back sales for tax reasons.

Average spot prices in the local Italian scrap market have mostly trended sideways compared to October 13 and are as follows:

Prices include delivery and exclude VAT.