The Italian ferrous scrap market experienced a predominantly bearish trend in March, with reductions of approximately €15-20/mt amid consistently low demand from steel mills, said Assofermet, the association representing Italian distributors of scrap, raw materials, and steel products, in a new press release. Continuous production shutdowns led to a significant slowdown in scrap deliveries, although steel mills’ inventories remained at medium-to-high levels.
Traders saw a drastic decline in volumes in the market, fueling concerns over the slowdown in the economic activities from which scrap is generated, resulting in decreased collection.
Any potential recovery in scrap demand could, according to the association, lead to price tensions, as many traders have been forced to purchase scrap at high prices to maintain relations with suppliers, then selling at a loss due to reduced quotations from steel mills.
Regarding steel mills, the scenario is not particularly positive in terms of prices and sales of finished products. Without an increase in steel production and sales of finished products, it is difficult to anticipate price increases in the short term, Assofermet noted.
According to Assofermet’s analysis, the scrap market in Turkey followed a downward trend at the beginning of March, with a reversal towards mid-month. However, the price increase was modest, keeping prices well below the levels seen at the beginning of the year. Scrap-importing Asian countries have seen a gradual increase in demand, albeit with modest price increases, while European markets have shown a slight improvement in demand with minimal price changes.
Italian steel mills maintained decent demand for stainless steel scrap in March, while the Italian and European pig iron markets were particularly weak. There were no purchases of pig iron and HBI. "(Russian) producers have not shown a willingness to offer discounts: therefore, the price difference between pig iron and scrap remains significant, but steel mills have not shown particular interest in purchasing pig iron," commented the association. It went on to state, "Internationally, there has been good demand and price levels overall, and, in addition to offers from Russia, offers from Brazil and Ukraine have reappeared."
The sentiment for April is moderately optimistic for pig iron, with the expectation of a return in demand from numerous consumers.