Italy

After a weak start to the year, the European stainless scrap market has showed signs of stabilisation in the second quarter, supported by alloy prices but still constrained by uncertain demand and growing pressure from Asian semi-finished imports. Prices have moved slightly higher to Euro 1200-1300 per tonne for AISI 304, Euro 2100-2300 for AISI 316 and Euro 450-550 for AISI 430.

Support has come mainly from nickel but the recovery remains limited as the market only partially reflects the theoretical metal value, highlighting still cautious demand. The 316 grade has performed more strongly, supported by molybdenum, maintaining a wide spread versus 304 of up to Euro 1000 per tonne. Meanwhile, 430 has remained weak owing to the absence of nickel and sluggish industrial demand.

On the operational side, the market remains in a fragile balance. Steelmakers are limiting scrap purchases, both to cool prices and because of increased imports of slabs and nickel pig iron (NPI) from Indonesia. Seasonal factors are also playing a role, with activity gradually slowing ahead of summer shutdowns.

Scrap collection remains constrained, preventing sharper price declines despite reduced mill buying. End-user demand, however, has yet to show clear signs of recovery, particularly in the construction and durable goods sectors.

Alloys are driving the market, with 316 leading and 430 lagging behind. As a result, the market is becoming increasingly polarised: high-alloy grades remain more resilient while lower grades are more exposed to cyclical demand weakness.

The key factor for 2026 lies outside Europe. Indonesia, a global leader in nickel and stainless semi-finished production, is continuing to exert strong pressure on the market. Low-cost NPI-based slabs are compressing European stainless steel prices, reducing scrap demand among the mills. The impact is clear: a de facto price cap on scrap, particularly for 304, limiting its upside even when fundamentals are supportive.

Within Europe, Italy stands out for its industrial policy focused on sustainability. Public support measures are aimed at boosting scrap-based stainless steel production and reducing reliance on high-carbon imports. In the medium term, the Carbon Border Adjustment Mechanism could further support domestic production and enhance scrap valorisation.

The overall outlook remains cautious. The second quarter has marked a shift from weakness to a sideways market with a slight upward bias, but without a full cyclical recovery. 304 remains under pressure, caught between stable nickel and import competition; 316 has confirmed itself as the most resilient segment; and 430 remains marginal.

For the second half of 2026, indicators point to a moderate price recovery, largely dependent on industrial demand, alloy price trends and global trade dynamics. The stainless scrap market is entering a phase of structural transition, increasingly shaped by global forces rather than purely regional fundamentals.