Ferrous Scrap, Italy

After a week of intense discussion during the Davos World Economic Forum annual meeting, the outlook is of a troubled world pressed for solutions across a number of fronts, but with optimism provided mainly by human cleverness and progress. Despite the concerns about European debt markets and uncertainty economic growth, and also the Arab Spring and the Occupy movement, business optimism is in part tied to any public spending plans that European and U.S. governments can launch in the future. In short, low business confidence, moderate economic growth, tax increases and rising youth unemployment are suppressing the spending power of individuals and households. This also means less steel consumption! To be an optimist is priceless: even during the worst crisis, positive business opportunities are available for those who are prompted to seize on the right opportunity.

The rise in ferrous scrap prices stopped during January here in Italy, following the general trend. On the domestic market the first price cuts have been seen, following previous increases up to €20 per metric ton. Deliveries have been delayed by three to four days by truck strikes, but the mills’ inventories are enough to cover their needs. January, arrivals by vessel were about 40,000 metric tons of scrap, about 60,000 metric tons of pig iron and 105,000 metric tons of HBI.

February prices will be driven by the weaker market and demand but balanced by difficulties in logistic caused by the strong winter that has gripped Europe.

Lower pig iron consumption means inventories have remained steady, even if import volumes were lower.
Steel flat products prices have experienced €30 to €50 increases, a rebound from the bottom they touched in December. Long products are, as usual, following the up and down scrap price movements. Sales volumes remain affected by slow economic growth.

Ruggero Alocci can be contacted at mail@alocci.com.