Italian scrap market slows on production cuts: Assofermet

Italian steel trade association Assofermet sees disrupted scrap flow as mills are suspending procurement due to production cuts and maintenance work this month in an effort to balance demand and supply.

“The sentiment for these days of May is uncertain due to the production reduction programmes, particularly of rebar producers who are reporting poor order books … Despite the level of stock at distributors being low, there is concern regarding the price decreases of May,” the association comments in its market report sent to Kallanish. From the beginning of the year, the market has been characterised by continuous ups and downs, an ”uncomfortable” scenario, which now seems to have become the norm, it adds.

April proved to be a slow month due to the Easter and bank holidays in Italy. Demand was slow and price declines were registered towards the end of the month, despite lower scrap availability.

Italian scrap prices are moving downwards very quickly this month. Values are declining by some €50/tonne ($54) compared to the beginning of May. The entire flat and long steel industry complex is preparing for a steep price fall across all products as the reduced consumption observed in recent weeks has pulled down values following their first-quarter uptrend (see Kallanish 18 May).

Meanwhile, most mills expect declining pig iron prices following the “dead calm” recorded in April. “The price gap on international markets is widening: Europe and Turkey are registering the lowest quotations, while the US market, which mainly absorbs Brazilian pig iron … has recorded prices at least $100/tonne higher,” Assofermet comments. Material availability in Italy remains good, it adds.

Natalia Capra France