In our scrap market analysis of last week, we reported that that there were a limited number of offers in the Turkish scrap market due to the increasing price levels. Although some mills were in the market in order to make purchases last week, they were unable to conclude bookings since the limited number of offers in question exceeded the expected price levels. In the latest two bookings heard, ex-deep sea HMS I/II 80:20 scrap was booked at the level of $553/mt CFR Turkey and P&S scrap was booked at the level of $563/mt CFR Turkey; meanwhile, an ex-Baltic A3 cargo, which also included a small amount of bonus grade scrap and shredded scrap, was booked at $564/mt CFR Turkey.
This week's Turkish scrap market, where there is a lack of availability of ex-US offers, has seen a continuation of uncertainty as regards prices. It is thought that the offers that will be made will be higher than the abovementioned prices. Taking into consideration the prices accepted by the Far Eastern mills, it is likely that shredded scrap in Turkey will be offered in a range of $590-600/mt CFR Turkey. Meanwhile, an ex-Europe cargo of HMS I/II 70:30 scrap is being offered at the level of $547/mt CFR Turkey. The recently fluctuating €/$ exchange rate has also been influential on the prices.
This week, ex-Black sea A3 grade scrap is being offered in a range of $550-560/mt CFR Turkey. As the classic soaring market situation continues, i.e. every new booking is higher than the previous one, the level of $560/mt CFR is currently being tested after the level of $550/mt CFR Turkey was accepted.
Looking at how the scrap market has developed over the past four months, it is seen that the prices that were at around $350/mt CFR Turkey in December have marked an increase of 57 percent, rising to $550/mt CFR Turkey in March. Taking into account the 65 percent iron ore price hike for 2008 and the increase of 70 percent in longs prices since December, it may be said that the price levels reached by scrap are not so surprising after all.