Italian steel scrap market report: An economy recovery could be foreseeable

Stahlschrott (Foto: Marc Weigert)

Genoa, Italy – It is difficult to talk about numbers and production when from France to Mali, passing through Syria, Lebanon, Egypt, Ukraine and several other countries, you see see death and destruction. But plans must be made for the future trying to understand where and how markets move. Usually, at the end of the year, some comments are dedicated to what happened. According to Alocci Rappresentanze Industriali, today some price indications are more eloquent than any comment.

The 62pc iron ore price around 41.50 $/t delivered China, the iron ore freight West Australia to North China below 4.90 $/t and Tubarao to Quingdao/China below 9.70 $/t, the premium hard low-volatile coking coal prices around 75 $/t fob Australia, the Q235 Chinese billet price around 240 $/t fob basis, the HMS 1/2 (80/20) around (or below) 191 $/t C&F Turkey, the Ukraine basic pig iron around 175 $/t Fob Black Sea ports, the WTI Crude Oil below 41 $, the China containerized freight index from Europe around 930. Other prices can freely added.

But the sense is always the same: Starting from a so low prices level it could be foreseeable an economy recovery in the short future, may be during the first half of 2016. It will not be a comeback to the years before the crisis, but something better than the current situation. The first positive signal, for the steel operators chain, is the aim of the Chinese Government of no longer support the private steel makers who are facing bankruptcy, due to the excess of capacity and the negative effect of the continuous decline in steel prices. It means that the strong worldwide overcapacity could be reduced during the next year.

It is not easy to explain what happened during November in Italy. At the beginning of the month some mills reduced their spot prices of 5 – 10 €, but others remained with their prices unchanged. After ten days the Mills who cut the prices were obliged to put, always on the spot market, 10 – 15 € more to receive enough scrap to cover the needs. The others, who remained with unchanged prices, were also obliged to increase their prices of 5 – 10 €. At the end of November several mills, interested in receiving as more scrap as possible in December (to reach the seasonal fermatures with high inventories), increased their spot prices of further 5 – 10 €.

A little bit different are those deals made with the European Suppliers on monthly basis: The mills paid the same prices of October for small quantities and increased the prices of 10 € for the contracts with large tonnage. It is important also to point out that the foreseen reduction in the November production was in the end very low. All that due to a better end-user demand – maybe to refurbish the inventories – and some better sale prices (plus 10 – 20 €), but also the need to use as more as possible electric power against the “take or pay” contracts. The arrivals at the Italian ports in November were abt 20 Kt for scrap, abt 95 Kt for pig iron and abt 90 Kt for HBI. The scrap yards inventories are always suffering the low old scrap generation and new scrap collection. Still reported are some delays in mills payments.

Following the November official average prices reported (€/pmt delivered):

New arising E8:
Italy 170
France 178
Germany 178

Shredded E40:
Italy 175
France 183
Germany 183

Demolition scrap E3:
Italy 155
France 158
Germany 158

The December scrap market is conditioned by three main causes: the scrap dealers who need to get at the end of the year the same inventories they had at the beginning of 2015, the limited working days available (around 15 days) and the mills aim to close the year with the higher possible scrap inventories. It means that mills that are in a hurry to receive scrap have to pay higher prices.


The HBI arrivals at the Italian ports during November have been two cargoes from Black Sea and one from Libya. Another cargo from Venezuela is expected in these days. Last HBI offers are reported around 175 – 185 $ pmt CIF Italy. The November arrivals remained on the standard volumes with about 95 Kton, all from the Black Sea ports. The pig iron offers are now quoted around 205 – 220 $ pmt CIF for January shipment. The inventories at ports and mills remain well recovered.

Source: Alocci Rappresentanze Industriali