Italian steel mills cut scrap purchase prices, spot prices mostly stable

Over the past week, many Italian steel mills have lowered their scrap purchase prices by €5-10/mt, signaling to the market a definitive halt to increases. However, the contracts closed this week were signed at the same levels as last week or slightly lower. “Prices are stable. Some people took 5-10 euros off their price lists, but this is more of a stop to the uptrend than a reversal,” commented one scrap dealer. According to another trader, the market is quite sluggish and there is little activity on both the scrap collection and sales sides. In fact, it seems that some steel mills have suspended deliveries this week and are planning slowdowns or shutdowns to cope with the weak finished market. “It is impossible for steel mills to sustain further price increases and there are no fundamentals for a recovery,” said an official at one mill stated.

Market participants are divided regarding the June market. Some expect declines starting next week due to the difficulties in the finished steel market and the possibility of a further slowdown in production. Other traders, on the other hand, expect prices to remain stable as there is still a substantial shortage of scrap and they are buying scrap at high prices. 

Prices include delivery and exclude VAT.

Although one steel mill lowered its scrap purchase prices by €10/mt, local scrap prices have remained mostly unchanged in the Spanish market, with only a slight increase of €5/mt for HMS and shredded. Energy prices remain low in Spain and so they are attractive for producers, who are buying cargoes with fast delivery times to take advantage of the situation, preferring local scrap. According to one international trader, in fact the import market is relatively quiet and mills are not buying much at the moment.

Prices include delivery and exclude VAT.