Ex-Black Sea scrap sales to Turkey almost grind to halt

Thursday, 01 October 2015 17:54:53 (GMT+3)   |   Istanbul
       

Ex-Black Sea scrap sales to the Turkish market have almost ground to a halt since suppliers in the region have not been able to compete with deep sea scrap offers due to high collection costs. Since Turkish buyers are using recent ex-US scrap prices as a reference point, they have lowered their price expectations for ex-Black Sea A3 grade scrap to the range of $180-185/mt CFR. However, there are rumors that many Black Sea scrap suppliers have withdrawn from the market since, due to their high costs, they have been unable to meet Turkish buyers’ prices expectations. Also, it is heard that scrap collection activities in the Black Sea region have almost ground to a halt given the low levels of prices. Currently, most suppliers in the region are offering scrap at $198-200/mt CFR, though with some offering as low as $195/mt CFR. Some Turkish buyers think that Ukrainian scrap suppliers are more flexible in their offers to the Turkish market and also consider that some suppliers of ex-Black Sea scrap are under sales pressure and are likely to cut their offer prices since they are operating with the support of bank loans and have liquidity problems. Nevertheless, it is thought that any deals concluded from the Black Sea under such conditions will be limited to small tonnages. In this context, it will be difficult for Turkish steel producers to procure scrap supplies from the Black Sea region in the coming period.  


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