Local Italian scrap prices mostly remain stable, some deals at higher prices create tension in market

Even though the local Italian scrap market has mostly remained stable this week in line with expectations, some steel mills have closed deals at higher prices, creating tension in the market. Some traders interpret this as a sign of higher prices in November, while producers remain reluctant to make any kind of upward correction.

Over the past week, some mills have increased their scrap purchase prices by €10-15/mt. According to some market participants, these are isolated cases related to the contingent needs of the mills in question. “No one expected such prices, but there should not be a general increase in scrap prices,” commented one trader. Other traders, on the other hand, think that this is a clear sign of an increase that is likely to materialize in the November contracts. Moreover, according to one source, “Traders may stop selling scrap until quotations go up”.

Producers say they are puzzled by these upward movements because in their opinion there are no market conditions supporting an increase at the moment. In fact, steel mills are planning shutdowns for the All Saints’ holiday (November 1) and several will halt production for at least a week to cope with the difficulties in the finished steel market. “We will wait until the first week of November and try to resist the demands for an increase from scrap dealers,” said an official at one steel mill.

Since most market players think the higher prices do not reflect the actual market conditions, SteelOrbis has decided to keep reference prices stable for now until increased levels are confirmed by other deals.

Prices include delivery and exclude VAT.