Local Italian scrap market mostly stable amid great uncertainty

Once more, local scrap prices in Italy have remained largely unchanged this week. Uncertainty still reigns among market participants as to what the direction of prices will be in March. The situation may become clearer next week.

The local Italian scrap market has been stable this week, though steel mills have given mixed signals. Some producers have lowered their purchase prices for shredded and busheling by €5-10/mt on the grounds of poor sales of finished steel, especially rebar. Others, on the other hand, have accepted higher prices because, probably, according to one source, “they have not been buying for a while and had slightly lower prices to begin with. Now they need scrap and so have accepted the higher prices proposed.”

However, market participants are uncertain about what the price trend will be in March. One source commented, “Steel mills only buy if they have orders. It is difficult to foresee how they will behave.” According to some traders, the earlier signs of weakness that could have indicated lower prices have been cancelled out, and the behaviour of steel mills this week suggests that there is room for improvement. Others are less optimistic and assume a stable or slightly declining market due to low demand and generally low finished steel outputs.

Prices include delivery and exclude VAT.

The Spanish scrap market is also in the doldrums, with mills showing little interest in buying new cargoes due to low levels of finished steel production. Market participants expect demand to improve in March, though, as steel mills' outputs are expected to increase, according to sources. This could also reawaken their appetite for scrap imports, the volumes of which are currently at very low levels, as imports are about €10/mt more expensive than local scrap.

Prices include delivery and exclude VAT.