European scrap prices seen increasing significantly

New Italian scrap import contracts from other European countries are stable month-on-month, traders tell Kallanish.

Scrap import contracts are usually agreed between the tenth and 15th day of each month. This month Italian mills are paying €250/tonne ($296) delivered on average for the imported mixed grade new arising quality E8, in line with domestic E8. Some grades have remained stable compared to October, while the high-quality grades such as E8 increased by €10/t m-o-m, sources suggest.

Traders, however, are noticing a short scrap supply in Europe and a purchasing frenzy in Eastern European countries to meet the high level of rebar demand stemming from strong construction sector activity.

This, together with demand from Turkish buyers, is also creating tight supply. “Italian mills refuse any price increases, but some are finding themselves without material unless they make quick decisions and pay €10/tonne increases,” a trader comments. Import prices for lower-quality material, such as steel turnings or cheaper demolition grades, currently in strong demand, are also forecast to increase significantly next month on short supply.

This month, Eastern European countries such as Czech Republic and Poland have seen scrap increasing by €5-10/t in their domestic markets. Italy has seen a €5/t decrease month-on-month so far, while French and German scrap has remained stable or increased slightly.

For December, and considering fast-rising international values, sources forecast hikes of €15-20/t on the domestic markets in Italy, Germany, France and Eastern European countries. A similar increase is forecast to happen on import prices into Europe, Kallanish hears.