Local Italian scrap market stable due to sluggish supply and demand

This week, the local scrap market in Italy did not see any major changes and prices remained largely unchanged. Market participants expect prices to remain stable or fluctuate within a limited range throughout the summer period.

The local Italian scrap market has been very calm over the past week, and SteelOrbis’ sources report a substantial balance between supply and demand, both sluggish at the moment, resulting in unchanged prices. According to the sources, “some mills have already slowed down or stopped production by laying off workers” while others are planning stops for next month in an attempt to cope with low demand for finished products. "Demand [for finished products] shows no signs of recovery and the attempt to raise prices is not yielding the desired results. Inventory levels are starting to be high,” commented a steel mill official, adding that they will continue trying to lower scrap purchase prices for these reasons.

According to traders, “producers keep talking about reductions just to condition the market and not to have to suffer further increases”. Sources agree that there is no room for further decreases in the electric arc furnace raw material because “new scrap is expensive and there is a fight among traders to get their hands on the material from workshops”. Another contact agrees and adds that  “scrap is scarce and they [producers] need it” and according to most sources even signals from the international market do not indicate any possible downward movement for Italian scrap. Market players therefore expect a substantially stable market between now and the end of the summer holidays, with possible fluctuations in a very limited range depending on the needs of individual steel mills.

Prices include delivery and exclude VAT.

With regard to the local Spanish scrap market, prices remained stable this week; sources report that mills’ stocks are really low, but their demand is also on the low side. Production is expected to slow down in the near future as some producers will shut down a few days for maintenance, but mills are stressed to get enough raw material. Therefore, traders are expecting small increases in prices which they hope to discuss next week when the 21st National Congress on Recycling and Recovery organized by Federación Española de la Recuperación y el Reciclaje (FER) will be held in Madrid (June 19-20).

Prices include delivery and exclude VAT.