Local Italian scrap market still declining

This week, the local scrap market in Italy continued to suffer from the impact of last week’s falling international prices. However, market participants have different ideas on how the situation will evolve in the near future in Italy. In particular, suppliers have decreased their purchase prices and some of them intend to go even for lower levels, citing weak finished steel sales. However, scrap sellers have been reporting low scrap inflow and are aiming to resist selling at lower levels.

Over the past week, local scrap prices in Italy have fallen again by €15/mt, depending on quality and the steel producer. Suppliers who had hoped that last week's decreases were only an isolated case have had to deal with steel mills adapting their purchase prices to the international market and, in some cases, suspending deliveries in the face of very few orders for finished products. Furthermore, steel mills' purchase price ideas are bearish. One market insider stated, “Mills are seeking to lower purchase prices by €20-30/mt because the finished market is not doing well” and shows no signs of recovery. Moreover, both prices and orders for finished products are weak and could fall further under pressure from the currently low import longs prices.

However, some scrap dealers are aiming to resist mills’ purchase price reductions as they continue to complain about a shortage of material. “There is little material. It is not enough, and buyers are competing for it, so [the price] cannot drop much further,” commented one source. According to another market participant, traders are struggling to find material for their scrap yards.

Prices include delivery and exclude VAT.