Local Italian scrap market stable, market players divided on October price trend

Once more, this week the local scrap market in Italy did not see much change in terms of prices and demand. However, increases in Turkey (where HMS I/II 80:20 scrap from Europe has reached $380/mt CFR) and the situation in China are starting to exert an influence on the Italian market, manifested in the more moderate reductions in scrap purchase prices requested by steel producers for October. “Before they asked for €20-30/mt, now they ask for €5-10/mt. Producers’ desired declines in scrap purchase prices are not materializing, because they are not reflected at an international level," one source commented, adding, "Prices will probably remain stable, but we need to see what will happen now that prices in China have started to fall again."

While for some market players, it is too early to talk about a possible rebound, others think that it could occur before the All Saints' Day holiday (1-3 November) given the trend of scrap prices internationally. “There could be an increase before the holiday. We will have to see to what extent. After all, scrap prices have dropped twice as much compared to finished steel, so a margin exists," one market player said. Producers disagree. According to them, the upward trend seen in Turkey cannot materialize in Italy because it is not supported by finished steel consumption. One official at an Italian steel mill commented, "The increases are not linked to the real market. The bullish trend cannot happen because we have neither margins nor orders." According to another source, producers "are in no hurry to buy" and most likely many steel mills will extend the holiday period to further slow down production.

Prices include delivery and exclude VAT.

Even in Spain, the demand for scrap from steel mills is quite low as orders for finished products are at similarly low levels and producers are therefore in no hurry to purchase large quantities of scrap. However, the reduction of €15/mt requested last week by an important steel mill was not accepted by suppliers, due to the increases that are occurring in the international market. As a result, prices bounced back to mid-September levels. According to sources, European sellers have significantly increased their offers and steel mills have preferred to accept increases from local suppliers rather than give in to speculation in the import market.

Prices include delivery and exclude VAT.