Scrap metal prices in Italy decline amid uncertainty: Assofermet
March is expected to be a weak month for scrap metal purchases in Italy. However, according to a recent report by the Italian trade association Assofermet, the new scenario of war in the Middle East, the continued decline in sales of finished metal products and the limited availability of high-quality scrap do not allow us to make any clear forecast for March.
The Association notes that it will be necessary to closely monitor the development of sales of finished products and, above all, the level of production against the background of the prospect of rising energy prices associated with the new US-Iranian conflict, the consequences of which remain extremely uncertain.
In February, the market began to grow rapidly, but then stabilized at the end of the month. In the first half of the month, the average price increase was about 15 euros per ton ($17.60/ton), which confirms the upward trend already observed in January. This led to an increase in sales of scrap metal in the domestic market, which allowed steel mills to cover their needs for raw materials.
"By the end of the month, limited production schedules, the stagnation of the Turkish market and the further deterioration of the situation in the Middle East partially cooled the market and provoked the risk of further price declines, which has not yet materialized," the note says.
There is growing concern in the pig iron segment about the lack of alternative sources of supply to Russia and Ukraine, which also face very high costs associated with CBAM. At the same time, Brazilian producers are seeking to raise prices in the first days of March.
This increase reflects the rapidly changing geopolitical situation, which inevitably leads to higher prices for both energy and insurance, Kallanish notes.
"The entry into force of the CBAM regulations, difficulties in understanding the cost calculation mechanism, which varies depending on the origin of the material, and the fact that most steel mills already have sufficient reserves, influenced the new negotiations. This is happening despite some signs of buyer interest, especially in Brazilian pig iron, the cost of which is expected to be lower than that of other sources," Assofermet concludes.
Author: Natalia Capra France
Kallanish.com