Having suspended their scrap purchases in recent weeks, the Turkish producers have not yet returned fully to the market. As import scrap prices have not reached the desired levels and given the difficulties they have been experiencing in selling finished products, the Turkish producers have continued to delay their scrap purchases. Ambiguity currently surrounds the scrap buying strategy of the Turkish producers, as they try to manage with scrap bought from the local market and at the same time try to increase their finished steel sales.
It is observed that some ex-US scrap suppliers have insisted on price levels of around $260/mt CFR Turkey, whereas some others have been able to slightly reduce their price. According to the latest deal heard, a Turkish producers has concluded two ex-US scrap deals at the following prices: $240-245/mt CFR for HMS I/II 80:20, $245-250/mt CFR for shredded scrap and $250-255/mt CFR for P&S scrap.
Although there has been no intense purchase activity in Europe, scrap prices in this region are currently on an upward trend. It is heard that scrap prices (bought from France and Germany) in Italy and Spain are at levels of around $250-260/mt CFR.
Although Turkish producers' price idea for ex-Black Sea scrap is at around $220/mt CFR, this level has so far not been met with acceptance by the ex-Russia scrap suppliers.
In the local Turkish scrap market, the HMS I (extra DKP grade) price level has this week been at around YKr 37.5/kg ($230/mt). It is observed that the Turkish producers have been trying to get by with scrap they have been buying from the local market.
If finished steel purchase activity gains momentum (with a positive knock-on effect on price levels), Turkish producers may then start to buy scrap again given the greater clarity as regards the market situation.