Italian steel scrap prices lower in February

The Alocci RI Group has published a report on the Italian steel market for February that show some good signs, but also some flaws.
Dr. Stephan Barth,

The  iron  ore  rally,  with  prices  now  over  50$,  far  from  December  2015 lows,  raised  the  question  if  these prices  are  sustainable  because  supported  by  fundamentals  or  it  is  just  a  jump  that  will  pass  in  short  time. Anyway  some  positive  signals,  even  if  so  light  to  be  almost  not  perceptible,  are  in  front  of  us:  the  better demand  of  the  flat  steel  products  and  the  resulting  raise  of  the  prices,  new  orders  from  the  car-makers  who are  increasing  their  sale,  the  arrival  of  the  new  Algeria’s  rebar  import  licenses,  even  if  with  some  volume reductions.  Also  the  return  of  the  Turkish  buyers  on  the  market  with  strong  demand  and  better  prices  is essential in this time.

Talking  about  the  scrap  negotiation  during  February  here  in  Italy,  we  can  underline  that  on  the  domestic  spot market  the  prices  moved  down  around  5/10€  at  the  beginning  of  the  month,  remaining  unchanged  until  the end.  Only  one  steel  mill  acted  strongly  with  the  suppliers,  looking  for  important  scrap  quantities  at  higher prices  than  the  market  ones.  The  monthly  contracts  with  the  European  suppliers  have  been  settled  with 10/15€  reductions,  for  smaller  quantities  than  the  usual.

The  arrivals  at  the  Italian  ports  in  February  were below  the  volumes  seen  the  previous  months:  abt  3  Kt  for  scrap,  abt  60  Kt  for  pig  iron  and  abt  90  Kt  for  HBI. The  mills  inventories  are  a  little  lower  than  the  standard.  It  is  important  to  say  that  also  the  Italian  Mills Federation  stopped  the  survey  of  the  monthly  average  prices,  as  made  by  other  European  national Federations.  It  is  also  a  signal  of  the  strong  difference  between  the  lowest  and  highest  prices  paid  by  the end-users on monthly basis.

The  forecast  for  March  contracts  is  oriented  to  small  increases  in  term  of  prices,  but  also  more  quantities could be supplied to satisfy the moderate increase of steel production.

During  February  the  HBI  arrivals  at  the  Italian  ports  have  been  higher  than  the  pig  iron.  It  is  the  first  time  we noticed  that.  All  the  cargoes  were  from  Black  Sea.  Last  HBI  offers  are  reported  around  165/175$  pmt  CIF Italy.  The  pig  iron  arrivals  were  only  60  Kton,  after  the  December  highest  of  167  Kton.  Also  in  this  case  all the  quantities  were  from  the  Black  Sea  ports.  The  pig  iron  offers  are  now  quoted  around  $200/210  pmt  CIF for March shipment. The inventories at ports and mills remain well recovered.


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