The scrap price increases in Italy towards the end of June have not spurred a scrap sales volume recovery.
“Considering mills’ still-elevated stocks of finished products, it is necessary to be cautious when talking about a recovery, as this large availability may have an impact on September and delay the market resumption [after August stoppages],” says Italian trade association Assofermet in a market note monitored by Kallanish.
The first days of June saw a further scrap price reduction after the steep declines in May. The decline however was balanced by mills’ lower needs and reduced scrap availability.
The June price reduction allowed several collection and recycling facilities to limit their sales and increase their stocks in view of a market recovery. This attitude caused prices to hike by €10-15/tonne ($11-16) in the second part of June, the association says.
Meanwhile, the pig iron market has been quiet in Italy, with demand weak. In June, mills bought almost no pig iron. Foundries have continued to procure material despite facing lower orders. Prices have moderately decreased over recent weeks due to low demand, Assofermet concludes.
The measure implemented in March 2022 by Italy’s economic development ministry (Mise) requiring scrap companies to notify authorities of every export sale has been extended until 31 December 2026 (see Kallanish passim). In the previous text of the measure, sellers were required to wait 20 days from the date of declaration before being permitted to ship their cargo. This has now been extended to 60 days.
“The action of the 60 days notification is a further obstacle to exporting and makes life difficult for our companies that do not benefit from the same government help as mills,” a source close to the association tells Kallanish. Italy is the only country in Europe trying to limit exports. Assofermet is against the move, as it strongly penalises one part of the value chain. The association will attempt to negotiate a rectification of the measure.
Scrap within the EU is structurally redundant and in surplus compared to the market requirements of EU steelmakers, while EU scrap consumption continues to be lower than collection, the association points out. From 2005, steel production in Europe has been steadily decreasing, falling from 182.3 million tonnes then, to 152.6mt in 2021, with a low of 132.2mt registered in 2020 due to the Covid pandemic, Assofermet concludes.
Natalia Capra France