Nonferrous Scrap, Italy

The Italians started operating the third week of January and did so in a very quiet market. Producers ended the year with some good orders, except that when the buyers (scrap consumers) saw in the first and second week of January that positions on the LME were going up, they refrained from giving producers all the specifications for the various grades of finished products, especially for brass rod and bars. That held the producers up from starting their work.

This changed quickly when the consumers needed materials, and they immediately gave producers their orders. So producers had some very good orders booked by early or mid-December. In the meantime, the market was quiet because of all the problems going on Italy with internal financing. People started working, but there was hardly any demand, and with the copper market going up, there was very little buying. Buyers were quoting end-of-2011 prices adjusted to the first days of January. As the LME went up, they stopped buying. I believe that some of the industry has old orders in hand and are going along with these. If they get new orders, they use old prices of old raw materials they have in stock.

There is a lot of high-grade copper scrap available, but no one is buying. People discounted prices. They buy cheaply and stock their material. It looks as if Chinese brokers are interested in buying, but they are quoting very low prices, not much higher than the domestic prices. There is hardly any advantage in trying to sell to China.

On the aluminium side, the LME in early January had a jump in prices of €150 and everyone was excited. It was a very good price, so everyone started buying scrap. Everybody is quite busy at the moment on most of the aluminium scrap grades. They are not rejecting or refusing any offers at the moment, fully believing there is going to be a further rise in aluminium prices.

Even in lead there was a price increase. The price of lead scrap moved up. Stainless and high-temp alloys are always tied to the ups and downs of the nickel price on the LME, which has been going up quite steadily. The stainless business is good from what I hear both on the scrap and production side.

Fernando Duranti can be contacted at info@leghemetalli.it.