From the middle of October, there have been slight increases each week in the local Italian steel scrap market, with prices now at the following levels:
Quality |
Average price (€/mt) |
Average price ($/mt) |
Turnings (E5) |
245-255 |
328-342 |
HMS (E3) |
285-300 |
382-402 |
Shredded scrap (E40) |
305-310 |
409-415 |
Busheling (E8) / (E8C) |
300-310 / 320 |
402-415 / 429 |
*Prices are for delivery to customer and exclude VAT
1€=1,34$
In the downstream market, sales volumes of of finished products are low, while prices are also low and do not ensure adequate margins. In other words, the finished product markets remain depressed both in terms of volume and in terms of prices, thus resulting in strong efforts by local steel mills to keep scrap prices within certain limits. Nevertheless, the same mills - which have been limiting their scrap inventories for a long time now - currently need to replenish their scrap stocks, while, according to sources interviewed by SteelOrbis, the mills will restrict their production. Since shortages of scrap will be a constant in the coming weeks, the sources expect longer-than-usual production stoppages in the month of December, not only in Italy but also in Europe. In fact, summer maintenance works will be brought forward amid predictions of a modest economic recovery in the third and fourth quarters of 2014.
In Europe, scrap prices have increased by €5-10/mt ($7-13/mt) since the middle of October, while, with regard to supplies coming from France and Germany to Italy, increases of at least €15/mt ($20/mt) have been observed. On the scrap collection side, there is less availability of scrap in Europe compared to several weeks ago, while the problem of supply shortages is not as severe in other countries in Europe as it is in Italy. Scrap collection in Italy has decreased and the generation of new scrap in the country has declined further. In October, huge flows of scrap substitute material (namely iron pig) arrived by sea in Italy, in order to offset the lower scrap collection in Italy. It looks like further supplies of pig iron will arrive in Italy in the month of November.
The situation is different in Turkey - the world’s biggest importer of scrap. After two weeks of increases, in which HMS I/II prices reached levels of $390-400/mt CFR, the trend is now sideways since local producers are not able to increase their finished product offers.
The shortage of scrap in Italy will also be the subject of a debate coordinated by Romano Pezzotti, president of Assofermet Rottami, during the 1st Assofermet Day & SteelOrbis Conference on November 15 in Brescia, Italy.