Some Italian mills lower scrap purchase prices as production halts approach

Over the past week, some Italian mills have lowered their scrap purchase prices by €5-10/mt. The drop, according to sources, is linked to the shortage of new orders and sales of finished steel that has been observed for months and to the negative outlook for the new year. “The situation in the steel industry is critical and it is really difficult to make margins,” an official at one steel mill said, adding, “After all, we are seeing the same negative trend in all international markets”. In Turkey’s import market, for example, the latest ex-EU deal has been closed at $337/mt CFR for HMS I/II 80:20 scrap, indicating a $5.5/mt drop in ex-EU prices.

According to trade sources, though, there is still a substantial shortage of available raw material. “Those who have to buy in December will have to face this factor,” as one source stated. Indeed, some contacts speak of a “standstill” rather than actual decreases. “The duration of the stoppages has already been reduced by some producers,” commented one scrap dealer. Another agreed, stating, “We will see whether the production stoppages will be more or less significant. In my opinion, the market will remain stable and quiet until the end of the year”.

Prices include delivery and exclude VAT.

In Spain, the local scrap market is following the international downward trend, and this week a major steel mill has announced €10/mt reductions in its scrap purchase prices. “Demand for scrap from producers is extremely low and is dragging down raw material prices,” commented one source. According to market participants, further declines cannot be ruled out if import prices in Turkey continue to fall in the coming contracts.

Prices include delivery and exclude VAT.