What has happened in July is that people were interested in buying and only buying from people that could deliver promptly. The first week of August most consumers are closed. Not withstanding this, there are some foreign suppliers that will deliver into the first week of August.
The reason for all of this is people are scared in looking at the LME jumping up and gradually getting higher and higher as the hours go by. They are thinking they better buy material for delivery by the end of July otherwise they will wait until early September and pay higher prices.
We can meet our requirements now or when we get back from holiday, there is a 50/50 chance prices have weakened and we are going to lose money.
Italian production in steel has gone up and is very close to 2007 levels. There is very little brass available. Copper prices are €100-150 lower than Germany. The Germans are paying higher prices than we are. The German market has picked up since last month. Until a month ago it had nearly died down, but they have picked up faster than Italy and anyone else in Europe. I think it is due to the German economy doing better than other European countries.
The southern part of Germany should be starting its holiday and the northern part will be going back to work the first week of August. I have a feeling industry will pick up there mid-August or early September at the latest. Italy dies down the whole month of August. Foundries are shutting down for three weeks for maintenance and slower production. At this moment, I have a feeling the majority of people are holiday-minded. We might start going back to work during the last week of August. It doesn’t mean there won’t be any activity in August. Consumers are active and follow the LME and if copper prices improve they will be buying whatever they can find. Countries that have a lot of scrap available will be quoting prices throughout August.
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Fernando Duranti can be contacted at fernandoduranti@leghemetalli.it
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