Scrap prices have become pivotal in determining the long market coordinates in Europe. The cracker of a rally has made mills arrogant with bookings lasting till February 2011. Buyers seem to be mystified with proclamations about extended booking.
On the other hand, producers are announcing longer holidays than usual due to scrap shortage and unaffordable prices. Finished demand is weak to absorb the cost push.
Scrap prices in Italy has reached unbelievable levels as the category 1, shredded, is available for minimum EUR 380 per tone.
As a consequence in Italy the price of billets and slabs have reached levels of EUR 480 per tonne to EUR 490 per tonne (USD 630 per tonne to USD 640 per tonne) which is not affordable with actual prices of rebars at EUR 500 per tonne and HRC at EUR 520 per tonne to EUR 530 per tonne.
The market is in schism between go getters and procrastinators. Some are actively looking for material, whereas others opt to wait for a possible down turn during first quarter of 2011.