Premiums for new scrap over old scrap in Italy further widened to around €40/t in June from €25/t in May as supply for the higher grade remained limited in the country.
The Argus monthly delivered to mill assessment for E8 new scrap in Italy increased by €85/t on the month to €470-480/t in June from €385-395/t in May.
Assessments for E3 old scrap and E40 shredded scrap rose by €70/t to €430-440/t and €455-465/t delivered to mill in Italy, respectively.
Italian mills made multiple increases in the past few weeks that combined to around a €80-90/t increase on the month for new scrap. The latest round of price adjustments was made in the past week for an increase of €30-50/t, depending on mill. Some mills may lift prices further in the coming weeks in order to secure more tons.
Steelmakers' demand for new scrap was very strong. Many of them have a full order book until the end of summer. And the current spread between scrap and steel prices at above €600/t for hot-rolled coil and close to €300/t for rebar allowed mills to purchase scrap at prices significantly above May levels.
"Under the current margins, many of our customers have little concern on what prices they will have to pay for scrap, all they want is enough scrap to keep their furnaces operating," one supplier said.
"And the lack of material in Italy drove mills to be increasingly eager for imported material, even at prices significantly above prices in Italy," one trader said.
Italian mills purchased E8 new scrap from Germany at around €500/t for June delivery, almost €100/t above their bids for German scrap in May. Some German suppliers today said they are still in negotiations with some Italian buyers and they expect prices to exceed €500/t for E8. Prices for bushelling from Germany were heard this month sold at €50/t above May levels.
Italian mills' interest for imported scrap in bulk cargoes also rose in the past few months again. Argus tracked another 50,000t scrap cargo leaving a UK port bound for Marghera in early June, taking the overall estimated shipped total from the UK to Italy to 185,000t in January-June. Italy's imports of UK scrap were estimated at less than 100,000t in 2020.
