Steel scrap market report from Italy, June 2015

Foto: O. Kürth

Genoa, Italy – June the 6th, is the WED – World Environment Day 2015, with the theme “Seven billion dreams. One planet. Consume with care”.

With his presentation letter, the new BIR President Mr. Ranjit S. Baxit, pointed out that “reducing carbon emissions is a prerequisite for the protection of our climate, and recycling does exactly that”. The question is “why is the recycling not part of the climate change discussions?”. And from my point of view the question is “why are the recycling operators not rewarded in their day-by-day activity in terms of CO2 certificates?”. The emission trading rules are based on the theory that those who can reduce emissions most cheaply will do so, achieving the pollution reduction at the lowest cost for the society. And who better than the recycling operators do all that? They collect and transform waste in reusable raw materials, saving not only the carbon emissions, but also the new raw materials and energies consumption, reducing the volumes of waste to be disposed or landfilled. Recycling is strongly committed to follow several environmental national and local legislations, with a high negative effect on the company’s operative costs. To be rewarded with the CO2 Certificates means to be partially compensate for all these costs. It is a very important target for the future of the recycling industry that is living worldwide a difficult situation of very low margins, since long time.

Here in Italy, May passed with a positive calm without, for once, the long and stressful negotiations between buyers and sellers. Prices remained unchanged both on the domestic market (with only very small adjustments) and also for the contract settled with the European suppliers. Deliveries have been enough to cover the needs and the mills inventories are now better, well supported by the strong arrivals of metallic raw materials at the ports. They have been abt 36 Kt for scrap, abt 170 Kt for pig iron and abt 69 Kt for HBI. Always out of the market Stefana even if the restart of the production seems now possible in the near future. Lucchini Piombino is restarting the rerolling of blooms and billets supplied by the domestic and deep-sea market. Flat products prices are still under negative pressure due to the strong competition with the import from China and the offers from Iran; profiles and beams are earning some small increases; long products for automobile and mechanical applications are well. Billets and rebars are always conditioned by low demand and not profitable sale prices.

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

New arising E8:
Italy 252
France 260
Germany 260

Shredded E40:
Italy 260
France 265
Germany 265

Demolition scrap E3:
Italy 242
France 240
Germany 240

June scrap prices are influenced by the start of the Ramadan celebration and by the possible lower activity of the Turkish buyers on the market. It seems a general feeling both for buyers and sellers to maintain the prices unchanged, to avoid any price movements on the finished products that are now a little bit better.

Only few words about Ilva Taranto: the AFO1 restart is foreseen for August. It could mean an increase of steel production, if new orders will be collected. The current main challenge for Ilva is the respect of the law target on the mandatory environment provisions, at least the 80% until July. The three Public

Commissioners are heavily involved in the search of the financial instruments for the revamping and cleaning up operations, but also in the solution of the several legal actions claimed to the Company.


Very high the pig iron quantities received in May, all of them arriving from the Black Sea ports. The last pig iron offers are quoted around $290/295 pmt CIF, for July shipments. The HBI vessels arrived in May were from Russia, Venezuela and Libya. HBI offers are now reported around Usd 255 pmt CIF Italy.

Source: Alocci Rappresentanze Industriali