Article:
Italian Scrap Market Sees Price Surge in February 2025
In February 2025, the scrap market in Italy experienced a price increase of between 10 and 15 euros per metric ton. This surge was primarily driven by steady demand from steel mills, which were actively procuring scrap materials to maintain production levels. According to Assofermet, the Italian association for distributors of scrap, raw materials, and steel products, while demand was solid, the economic uncertainty surrounding the global market led many companies to sell their stockpiles to avoid potential price reversals. Despite this, a trend reversal seems unlikely in the short term.
Steel mills in Italy are trying to contain costs by shifting their purchasing habits. They have increased the procurement of sheared scrap and demolition materials, which are more readily available and less expensive than busheling scrap. However, busheling scrap, considered a high-quality form of steel scrap typically sourced from industrial processes, remains in short supply.
At the same time, scrap stockpiles at recovery companies are reported to be low, suggesting that the overall supply of scrap materials is limited. Steel mills, however, have kept medium to high inventory levels, helping to buffer against any supply disruptions in the market. As scrap becomes increasingly scarce, companies are forced to adjust their procurement strategies to meet the needs of ongoing production.
Supply Chain and Demand Fluctuations in Steel
The shift in purchasing strategies, particularly with mills increasing reliance on sheared scrap and demolition materials, has impacted the scrap quality and consistency in the production of steel. Sheared scrap is often lower in quality compared to busheling scrap, but steel mills have adapted to using these alternative sources due to their availability.
Additionally, the international market has experienced similar trends, with scrap prices increasing across Europe and Turkey. In the Turkish market, prices have risen by approximately $25 per metric ton since January 2025. There are expectations that prices will continue to rise in the coming weeks as demand remains robust. Europe, particularly Spain, has also seen price increases of around €20 per metric ton. In France, prices rose by €10 per metric ton, with occasional peaks reaching €15 per metric ton. Meanwhile, Germany has seen price increases ranging from €5 per metric ton to €10 per metric ton.
The Asian markets, by contrast, have been more volatile, experiencing modest price fluctuations. This trend can be attributed to different local market conditions, including changes in production rates, regional economic shifts, and varying supply-demand dynamics.
Stainless Steel and Ferroalloy Markets Show Mixed Trends
The stainless steel market has faced mixed performance in February 2025. After an initial rise in prices, quotations began to fall due to production shutdowns and temporary layoffs in some mills. These shutdowns have created temporary disruptions in supply, leading to price drops in certain regions. Some operators in the market have begun stockpiling stainless steel in anticipation of future price increases, a strategy designed to hedge against any potential price hikes when the market recovers.
In the Indian market, a significant drop in prices was recorded, partially due to the unfavorable euro/dollar exchange rate. The discrepancy between the two currencies has made materials traded in euros less attractive in the Indian market, contributing to the price drop. On the other hand, in Europe, the energy crisis and rising raw material costs continue to drive production challenges, with many mills operating under high pressure due to elevated energy bills. This ongoing inflationary pressure is making it harder for manufacturers to maintain stable costs, influencing market trends in the short term.
Pig Iron and Hematite Iron Supply Challenges
In the pig iron market, supply reductions from Russia have shifted demand toward alternative sources such as Ukraine and Brazil, with prices currently ranging between $450 and $460 per metric ton. With Russia's role in the global pig iron supply chain shrinking due to geopolitical tensions and sanctions, suppliers from Ukraine and Brazil are now playing a more central role in meeting global demand. As a result, prices for pig iron are expected to continue increasing over the coming months as demand for these alternative sources intensifies.
The hematite iron market, which is used in steel production, has shown significant volatility in February. There was only a slight rebound in transactions during the last week of the month, after which the market seems to have stabilized somewhat. One of the contributing factors to this volatility has been logistical challenges within Europe, particularly due to the reduction in available transport. The situation has been worsened by overbooked freight trains, which have resulted in delivery delays. These logistical issues are contributing to a tight supply of iron and have had a knock-on effect on the production and pricing of steel.
Foundries and Ferroalloys: Demand Challenges and Price Increases
The foundries sector, which relies on ductile iron, has been reporting weak demand for this material. The demand remains subdued, and foundries are limiting their purchases to immediate needs. Ductile iron is used for producing durable components for industries such as automotive and construction, and while there is currently sufficient availability of the material, Assofermet warns that supply could tighten if demand rebounds in the future.
In the ferroalloys market, manganese alloys have remained relatively stable, with only slight price increases observed. Noble ferroalloys, such as FeMo (Ferro Molybdenum) and FeW (Ferro Tungsten), have seen notable price hikes, primarily due to growing demand for these materials in the production of high-performance steel alloys. The demand for high-end steel alloys in industries such as aerospace and automotive is driving this upward trend in prices.
Energy Prices and Overall Market Outlook
Energy prices have continued to be one of the dominant factors influencing the steel and scrap markets. Rising energy costs remain a significant challenge for producers across Europe and beyond. These increased operational costs are putting pressure on profitability, especially in industries that are energy-intensive like steel production and scrap processing. This, in turn, has created significant market volatility. As energy prices continue to fluctuate, many players in the market are uncertain about the future price trajectory for scrap, steel, and alloys.
As for March 2025, market sentiment remains uncertain, with the ongoing economic challenges, energy costs, and geopolitical tensions continuing to cloud predictions. It is expected that the markets will remain volatile, with fluctuating supply and demand playing a crucial role in pricing trends.
Key Takeaways:
• Scrap prices in Italy rose by 10-15 euros per metric ton in February 2025, driven by demand from steel mills.
• Steel mills are increasingly purchasing sheared scrap and demolition materials due to a shortage of busheling scrap.
• Scrap stockpiles at recovery companies are low, but steel mills are holding medium to high inventories to safeguard against disruptions.
• Turkey saw a $25 per metric ton increase in scrap prices, with similar increases observed in Spain (€20 per metric ton) and France (€10-€15 per metric ton).
• Stainless steel prices dropped due to production shutdowns and temporary layoffs, particularly affecting the Indian market.
• The pig iron market is experiencing rising prices, ranging from $450 to $460 per metric ton, due to reduced Russian supply.
• Logistical challenges in Europe, such as overbooked freight trains, have resulted in delivery delays and contributed to volatility in the hematite iron market.
• Foundries continue to report weak demand for ductile iron, but availability remains sufficient for now.
• Manganese alloys remained stable, while noble ferroalloys such as FeMo and FeW saw price increases.
• Rising energy costs continue to pressure the steel and scrap industries, influencing market trends and overall sentiment for March 2025.
