Italian and Spanish scrap markets started this week stable, but the expectation is for a correction in the coming days as June approaches and Ramadan starts, Kallanish learns from sources.

In Spain a new price level could be registered before the end of the month as a result of the start of Ramadan this Saturday, a merchant forecasts. "The market is stable, but a slow decrease in prices of some qualities of nearly €10-15/tonne ($11.1-16.7/t) could be expected by the end of May,” he says. “The Turkish market looks strong for the moment, but prices will fall once Ramadan begins.”

In Italy negotiations are currently fierce, with some sources saying June settlements will be down €10/t but others claiming they could be stable on-month. According to a few sources, discounts of €5/t are already available in the Italian market from some merchants.

While weakness in the market before the summer is normal, Ramadan is set to add more pressure on the international benchmarks. “The lack of demand is typical for the Spanish domestic market in June,” a Spanish merchant comments. “In addition, globally the market suffers during Ramadan, but we expect it to rebound quickly after that.”

In Italy, meanwhile, the finished products market is still struggling and mills are reluctant to accept higher scrap levels in order to avoid shocks in the currently fragile market.

New E8 quality scrap in the Spanish domestic market is offered at €245-250/t delivered, while both E40 and E3 delivered are at €230-235/t. E1 quality is at €210/t delivered.

In Italy E3 quality is at €220-230/t delivered, E8 at €250-270/t delivered and shredded E40 at €270/t delivered.