Italy’s Ferrous Scrap Market: A Period of Balance Amidst Global Uncertainty
In December 2024, Italy’s ferrous scrap market showed signs of balance between supply and demand, as reported by Assofermet, the Italian association for distributors of scrap, raw materials, and steel products. Despite this equilibrium, the market experienced slightly declining prices, as scrap collection within the country became scarce and increasingly expensive, making it challenging for prices to experience any significant rise.
The scrap market had a subdued performance in December, with only a few transactions completed. A notable challenge faced by the industry was the high cost of scrap collection, which contributed to a limited supply, complicating any potential price increases. This situation came at a time when the outlook for early January 2025 showed little clarity, with uncertainty around demand from steel mills and finished products continuing to dominate market sentiment.
Potential for Price Increases in Early 2025?
Looking into early 2025, there is a possibility that demand from steel mills could lead to an increase in scrap prices. However, the demand for finished steel products remained largely stagnant, which limited the capacity to absorb price hikes as requested by European steel producers. As prices continue to be under pressure, Italian distributors and steel mills will likely have to adapt to slow-moving demand and the potential for further challenges in the coming months.
International Scrapyard Trends: Turkey, Asia, and the EU
On the international front, the Turkish scrap market was noted to be stable. However, there were signs of weak demand, particularly within Asian markets, which presented an uncertain outlook for January 2025. Despite this, the sentiment in both the Spanish and French markets showed slight improvements.
This global instability has affected the movement of scrap prices, especially when comparing regions. As the international market remains sluggish, pricing stability continues to characterize key European markets, such as Italy and Turkey, while certain markets, including Asia, seem hesitant to recover fully.
Stainless Steel Scrap: Sluggish Activity Amid Global Economic Uncertainty
The stainless steel scrap sector in Italy saw sluggish activity in December, a trend largely attributed to the holiday season and global economic uncertainty. This had a clear impact on scrap markets, leaving them underperforming as industries took a cautious stance heading into the new year.
The uncertain outlook for early 2025 is closely tied to the overall trajectory of the global economy, which is expected to impact the movement of stainless steel scrap prices. With weak market sentiment and slow activity in December, it remains unclear how quickly the market will bounce back or if any noticeable recovery will occur in the first quarter of 2025.
Pig Iron and Ductile Iron: Stability Amid Dormancy
The pig iron market remained persistently weak, with stable prices and limited activity. This situation was partially driven by logistical challenges faced by Russian exporters, contributing to the stagnation within the market. Looking ahead, further price reductions are expected, but price stability will likely continue for some time, as the market waits for signs of improvement or new economic conditions.
Similarly, the ductile iron market also remained stable in price, despite a largely dormant market. This was influenced by low levels of activity and a reluctance to make larger purchases, with manufacturers preferring to keep stock levels low until more favorable market conditions arise.
Hematite Cast Iron and Foundries: Minimal Demand and Cautious Purchasing
The hematite cast iron sector saw minimal demand in December, with a marked reduction in purchases driven by a slowdown in the foundry sector. Many foundries have opted to keep low stock levels and have adopted a wait-and-see approach, partly due to high interest rates and limited visibility on future trends. This cautious attitude is typical of industries grappling with the uncertainty of market conditions and looking to avoid over-committing to purchases that may not be necessary.
Ferroalloy Sector: Stability Amid Concerns Over Safeguard Measures
The ferroalloy sector in Europe ended the year with price stability. However, the market remains concerned about the European Commission's investigation into potential safeguard measures, which could significantly impact import volumes. This investigation has raised alarms among market players, as a potential reduction in imports could distort the market dynamics, especially in light of insufficient EU production to meet growing regional demand for ferroalloys.
As Assofermet pointed out, any significant shift in import policies could disrupt the balance in the market, leading to higher prices or supply shortages for ferroalloys. This would further strain industries that rely on these critical materials for steel production.
A Fragile Balance Amid Global Challenges
In summary, the Italian ferrous scrap market experienced a challenging December 2024, with low activity, limited supply, and slightly declining prices. Early 2025 offers an uncertain outlook, with potential for price increases depending on demand from steel mills. International markets, including Turkey and Asia, remain weak, while stainless steel scrap and ferroalloys face challenges from weak activity and regulatory concerns. Overall, the scrap market is positioned for a period of cautious adjustment as it navigates global economic uncertainty and logistical disruptions.
