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Ferrous scrap prices rose very quickly across Europe in April, as domestic mills raised prices to match the export market.

The Russian invasion of Ukraine and the resulting shortage of supplies of key raw materials for steel from the Black Sea region caused prices of ferrous scrap and long steel products in Europe to rise sharply.

On 11 April, the European shredded scrap price stood at 634 dollar/ton (580 euro/ton), up sharply from 491 dollar/ton (437 euro/ton) at the end of February.

European scrap contracts for April were closed at prices of 45-70 euro/ton, rising month on month, depending on the steel mill and the level previously agreed for March.

Demand has slowed down because nobody wants to take the risk of having such expensive stock. Prices have jumped for both raw materials and finished products and there is a feeling that prices will now remain at these levels and it is not clear if or when they will fall, collapse or gradually decrease.

Italian steel mills have been forced to work with lower capacity utilisation due to high raw material and energy costs in order to maintain their margins. Italian prices for “Rebar – Export price – Thickness 8-32mm” have averaged 1050 euro/ton.

Companies across the industry noted that rising costs and material shortages weighed increasingly heavily on industry performance at the end of the first quarter. In particular, input costs continued to rise at a substantial rate amidst increasing delays in the supply chain. These persistent problems weighed heavily on business sentiment, with construction companies in the eurozone reporting pessimism about business prospects for the coming year for the first time in 15 months.

Buyers in Turkey, the main export market for Northern European scrap recyclers, held back from buying bulk cargoes on the high seas in search of lower prices.

The price of “Steel scrap HMS 1-2 80/20 Turkey” stood at 640 dollar/ton on 11 April, up sharply (+29%) from prices recorded at the end of February (496 dollar/ton).