In our previous report, we indicated that, after the slight downward adjustment recorded in May, the Italian scrap market showed some rising movement at the start of June, though more time would be needed to gain a clearer picture of the price trend.
The uptrend in the Italian scrap market has now been confirmed, and the price situation is clearer: compared with the end of May, prices indicate an average increase of five percent, with increases in demolition scrap and busheling attracting more attention as compared with shredded scrap, as a result of the reduced availability of these grades in the market. As one insider told SteelOrbis, in recent weeks there has been a greater influx of imported scrap from outside the euro area, especially due to the strength of the euro against the US dollar. At the same time, however, the volume of scrap coming from central Europe - especially Germany - has decreased. German industry continues to perform well, thereby resulting in reduced availability of German scrap for the foreign markets, including Italy.
In the Italian domestic scrap market, hot melting scrap (HMS) now stands in the price range of €300-320/mt ($427-456/mt) (with peaks of €330/mt ($470/mt) for high quality busheling), while shredded scrap prices stand at €350-360/mt ($499-513/mt) and busheling prices are at €360-370/mt ($513-527/mt) (with €380/mt ($540/mt) for shovelable scrap). All prices are for delivery to customer.
Overall, Italian producers' demand for raw materials has remained at decent levels due to good production rates and the recovery - albeit modest - of end-user steel sectors. Steel mills' scrap stocks will easily be able to sustain their planned production operations for the next couple of weeks.
Looking ahead, the forecasts for the Italian scrap market in the second half of June indicate stability, with prices that should not show great changes. The situation is unclear for July: according to some market players, prices could be pushed upward again, though not significantly.
In the international market, the trend followed by scrap prices has remained neutral in the Chinese market, while US scrap offers to Turkey have increased further in the last few days, even if Turkish buyers are quiet for the moment.