The Italian government’s tax cut to alleviate the burden of energy prices on energy-intensive sectors has resulted in many mills resuming production, thereby boosting demand for scrap, Italian trade association Assofermet says in a market note monitored by Kallanish.
This is causing a slight price increase in the domestic market, by some €15-20/tonne ($14.5-19.4), amid good demand for scrap at the beginning of October.
“The hope of scrap sellers is that this increase, but above all scrap demand, will consolidate … However, uncertainty continues to hover, particularly regarding energy costs and the instability of the international political situation,” Assofermet says. If mills resume working on three shifts, scrap availability, which remains sufficient for now, may nevertheless fall below requirements.
The reopening of the steel sector in September after the August break was often impacted by production stoppages and weak demand for scrap. From a price standpoint, the scenario remained mostly stable last month, but consumption continued to decline. The majority of steelmakers worked mostly nights to save on energy bills but also to cut output of finished products hit by low sales volumes.
The first days of October have shown signs of price increases internationally. The further weakening of the euro, which has stabilised around parity with the dollar, could revive exports of finished products.
Meanwhile, the declining pig iron price trend continues in Italy. Availability and offers remain plentiful from Russia and Ukraine. Brazil remains out of the Italian market, Assofermet concludes.
Natalia Capra France