After concluding many ex-Baltic and ex-US scrap deals last week, it is observed that Turkish steel mills are continuing to show demand for import scrap and in particular are continuing to make price inquiries for short sea scrap. Deep sea scrap prices, which had started last week with price levels at $325/mt CFR, followed an upward trend during the week, reaching $331/mt CFR in the most recent ex-US deal. Last week, suppliers especially in the Baltic and US regions concluded many scrap sales to Turkey, while European suppliers fell back in terms of sales as they were negatively impacted by the appreciation of the euro against the US dollar. Also, it is noteworthy that suppliers on the US West Coast concluded sales to Turkey last week since sales prices from the US East coast to Turkey were higher than the prices seen in deals concluded from the US West Coast to the Far East.
Having started the current week with news of upward movements in the Chinese markets, raw material and finished steel quotations in the global steel market have continued to rise. Although domestic finished steel prices in Turkey indicated a slight increase yesterday, August 7, prices on dollar basis in the local Turkish finished steel market remained stable. While Chinese billet export prices have failed to offer an attractive alternative to Turkish steelmakers, ex-CIS billet supply to Turkey has declined and billet prices from the CIS region to Turkey have increased as a result of the strong demand in Egypt for ex-CIS billet,.
Although Turkish steel producers continue to show demand for scrap, suppliers in the Baltic and the US regions are in no rush to conclude sales as a result of the deals they have already concluded to Turkey and may decide to increase their offer prices. On the other hand, European buyers are still having difficulties in terms of both their scrap collection activities and their scrap sales to Turkey as the traditional summer holiday period has started in Europe and also due to the ongoing appreciation of the euro against the US dollar. Although no explicit offer from suppliers in the Baltic and US regions has been heard in Turkey this week, it is believed that their offers for HMS I/II 80:20 scrap will be higher than $335/mt CFR Turkey. While demand for short sea scrap is a little stronger in Turkey compared to demand for deep sea scrap, it is observed that Russian suppliers’ offers to Turkey for A3 grade scrap are in the range of $328-330/mt CFR.
Considering the current circumstances both in Turkey and in the international markets, scrap prices are not expected to fall in the short term, but on the contrary are expected to continue their strong trend.