With the continuing price correction currently seen in the steel sector, it is still impossible to comment on how far down prices will go. Both in the flats and longs markets, new price corrections are heard with each passing day. However, the downtrend in the scrap markets started to be seen much earlier than the corrections in the finished steel markets, due to the halting of scrap purchases by the Turkish mills. With the Turkish steelmakers stepping aside from the markets after making high tonnage purchases in early summer, the scrap markets began to enter quite a calm period. Nowadays, the mills' scrap requirements are increasing gradually, but the slackness seen in the finished steel market is causing the mills to act with deliberation for the time being.
A recently heard ex-US scrap booking in the Turkish market, composed half of shredded scrap and half of HMS I/II 80:20, was at the level of $405/mt CFR Nemrut, while ex-Europe HMS I/II 70:30 scrap is being offered at $395/mt CFR Nemrut. This week, eight to 10 scrap offers have been heard, both ex-Europe and ex-US.
On the other hand, the ex-Black Sea scrap market for A3 grade material is trending in a different manner. Ex-Russia A3 grade offers are failing to compete with ex-deep sea scrap offer levels, as the ex-Russia A3 offers are standing at high levels due to anxiety over the additional export taxes which the Russian government intends to impose. Ex-Ukraine and ex-Romania A3 grade scrap offers have moved downwards and are currently standing below the level of $400/mt CFR Turkey. The price level for the last booking from these countries was around $395/mt CFR Nemrut for October shipments.
It is observed that some Turkish mills have partially suspended their production in order to carry out maintenance works, given the slackness seen in the finished steel markets. However, whether this will affect the scrap markets or not yet remains to be clarified.