Slow start in Italian scrap market in Sept with slightly soft price corrections

September has gotten off to a slow start in the Italian scrap market. After an August of production closures and slight price drops, the market sees both steel mills and scrap sellers with full warehouses. However, while on the one hand there is no rush to buy, on the other the light pressure to sell is mitigated by the fact that in August many mills chose to continue to receive scrap from sellers.

A stalemate scenario is emerging, in which all Italian scrap market players are maintaining a cautious attitude, waiting to see developments in the international markets. Scrap dealers do not expect major deals before next week, also because the fact that several steel producers continued to receive material during August "gave a break to the [scrap] market", a source commented. Scrap demand remains weak, but is balanced by low yet sufficient availability, which contributes to price stability. "We need to see whether the urgency to sell exceeds that to buy, before defining a price trend. For now, the conditions are perfect to foster a stalling of movement in prices and in market activity," another source said.

At the moment, in fact, even producers expect stable scrap purchase prices, even if some of them have already lowered their price lists by about €5/mt for all grades. It is worth mentioning that downward pressure is particularly mounting on busheling scrap (E8), a higher quality for which demand has decreased in recent months. The reasons behind this static and slightly downward market depend on several factors, but "there is a lack of demand for finished products, and exports are also struggling," a spokesperson from an Italian mill stated.

As far as Italian scrap prices are concerned, an average drop of €5/mt is reported this week, but, according to some market players, there could be a drop by €10/mt compared to current levels by the end of the month.

Prices include delivery and exclude VAT.