Declining Italian scrap demand at the end of January has created some concern among suppliers, says local steel trade association Assofermet in its latest market note obtained by Kallanish. The low availability of quality scrap is persisting and has contributed to the price stability observed in the market.
“It is important to remember that the sale of finished products has essentially remained unchanged, with consequent difficulty in passing on the scrap price increases already recorded in December to the finished product … January started with price hikes and a good flow of deliveries … Offers from collection companies, merchants and traders were at good levels, satisfying the needs of all steel mills, reducing warehouses’ stocks, partially giving up hope of further increases,” the note states.
It adds however that the picture at the end of January appeared less positive compared to the beginning of the month, with demand weak but offers sustained overall. This “could become a point of concern for the month of February, also in light of a possible slowdown and output cuts by two important producers,” the association adds.
Assofermet recorded relatively low demand for pig iron last month. At the same time, supply from Russia and Ukraine also decreased. Prices in Turkey are in line with the Italian market, as well as those recorded on the Chinese and Indian markets. The pig iron price differential of about $50-60/t persists between the European and US markets.
While scrap prices are stable for the moment in Italy, pig iron values increased last month to $440/t cfr and are seen rising further, Kallanish notes.
Natalia Capra France