The common view among scrap suppliers at the SteelOrbis Spring 08 Conference & 58th IREPAS Meeting was that scrap prices, which have for a long time been maintaining their steady uptrend, will not see any drop in the short term. Having delayed their purchases, in particular for ex-deep sea bookings, and staying focused on ex-Black Sea and short sea scrap instead, the Turkish mills have stated that longs prices will not indicate a decrease in the short term either, due to the robust demand registered, especially in the Middle East.
The uncertainty as regards the level at which prices stand in the Turkish scrap market - where only a limited number of offers have been available for a long time - came to a halt with a scrap booking concluded last weekend. With offers standing at the level of $600/mt CFR in the market for a long time, the prices in question had not been confirmed by the Turkish mills until last weekend. In the latest booking heard, HMS I/II 80:20 scrap was booked at the level of $605/mt CFR Turkey, shredded scrap at $610/mt CFR Turkey and bonus grade scrap at $615/mt CFR Turkey. It is very surprising for scrap prices, which were thought to have hit a remarkable record after reaching the level of $500/mt just one month ago, to mark such an enormous jump and exceed the level of $600/mt within just a month. The main factor in this jump is the fact that global scrap demand is higher than global scrap supply. In addition to the existing capacities worldwide, with the commissioning of new capacities it is considered that the demand for scrap will remain robust. The uptrend is not only limited to scrap but also applies to other raw materials such as pig iron and ferroalloys.
It is foreseen that scrap prices will indicate a slight increase this week as well. The booking level of $640/mt CFR concluded by an Egyptian mill for a scrap cargo ex-deep sea gives a signal that offers for Turkey will soar. High prices are being accepted for scrap purchases in markets competing with Turkey. With no offer level to determine the course of the market yet, it is estimated that offers for HMS I/II 80:20 scrap will exceed the level of $605/mt CFR which saw acceptance last week.
Ex-Black Sea scrap offers have also exceeded $600/mt CFR. Although not confirmed, there are even rumors in the market that a Turkish mill has concluded a booking for ex-Black Sea A3 grade scrap at the level of $607/mt CFR.
This year, it is expected that the major scrap consuming markets such as Turkey, South Korea, Egypt and Europe will be involved in fierce competition with each other due to the relatively low levels of global scrap supplies when compared to demand.