Local Italian scrap market close to the holidays, prices essentially stable

This week saw a further slowdown in trading activity in the local Italian scrap market, with prices virtually unchanged. Market participants report a “flat calm” situation in which demand and supply are equally low given the upcoming summer shutdowns of Italian steel mills. “The closer we get to the production halts, the more activity slows down. By now, everything is postponed until September,” one source commented.

Market participants pointed out that the long shutdowns of steel mills this year - some will start as early as next Monday and continue until the first week of September - have created a very different market trend compared to that of other European countries or Turkey, where stable prices and some slight increases have been seen. In Italy, in fact, local scrap prices have lost an average of €25-35/mt since their peak on May 17.

Sources seem to agree that prices have bottomed out and market participants' expectations for September are for unchanged price levels and some increases from mills that have stopped buying. One trader stated, “Lowering prices further is also difficult because margins are tight. Our purchase prices are still quite high.”

Prices include delivery and exclude VAT.

With regard to the local Spanish scrap market, sources report that prices are stable for the moment. However, one major steel mill has announced a €10/mt drop in its scrap purchase prices and it remains to be seen whether other producers will follow suit. Market participants report that demand is not particularly lively. In fact, shutdowns are also imminent in Spain. Steel mills will stop production for a fortnight on average, some at the end of July and others at the beginning of August.

Prices include delivery and exclude VAT.