Synopsis:
The Italian ferrous scrap market has undergone a bearish trend in March, characterized by price reductions of approximately €15-20/metric ton amid persistently low demand from steel mills. This downturn, as reported by Assofermet, the association representing Italian distributors of scrap, raw materials, and steel products, has been exacerbated by continuous production shutdowns, leading to a significant slowdown in scrap deliveries, despite mills' inventory levels remaining at medium-to-high.
Article:
Amidst the ever-shifting tides of the global steel industry, Italy's ferrous scrap market has found itself navigating turbulent waters. According to a recent press release from Assofermet, the association representing Italian distributors of scrap, raw materials, and steel products, the month of March witnessed a predominantly bearish trend, with scrap prices plummeting by approximately €15-20 per metric ton.
This downward spiral can be attributed to the consistently low demand emanating from steel mills, a consequence of the continuous production shutdowns that have plagued the industry. While scrap deliveries experienced a significant slowdown, the steel mills' inventories remained at medium-to-high levels, painting a complex picture of supply and demand dynamics.
Traders bore the brunt of this market fluctuation, as volumes dwindled drastically, fueling concerns over the slowdown in economic activities from which scrap is generated. This decline in scrap collection has cast a pall over the industry, raising questions about the long-term sustainability of current practices.
Assofermet's analysis highlights the precarious position in which many traders find themselves, forced to purchase scrap at high prices to maintain supplier relations, only to sell at a loss due to the reduced quotations from steel mills. This predicament underscores the fragility of the supply chain and the need for a more resilient and responsive system.
The association's assessment of the steel mill scenario paints a grim picture, with prices and sales of finished products failing to inspire optimism. Without an increase in steel production and sales of finished products, Assofermet notes, it is difficult to anticipate price increases in the short term, creating a vicious cycle that threatens to perpetuate the industry's woes.
Despite the bearish trend in the Italian market, the global scrap landscape presents a more nuanced picture. The Turkish scrap market, for instance, experienced a downward trajectory at the beginning of March, only to reverse course mid-month, albeit with modest price increases that fell short of the levels witnessed at the start of the year. Scrap-importing Asian countries have witnessed a gradual increase in demand, accompanied by modest price hikes, while European markets have shown a slight improvement in demand with minimal price changes.
Conclusion:
The ferrous flux that has engulfed Italy's scrap market in March serves as a stark reminder of the volatility and interconnectedness of the global steel industry. As steel mills grapple with production shutdowns and fluctuating demand, the ripple effects have reverberated throughout the supply chain, impacting traders, distributors, and the overall economic landscape. While glimmers of hope emerge from select regions, the path to recovery remains fraught with challenges.
Source: STEELGURU
|
