Import
scrap prices in
Turkey have decreased to their lowest levels of the past five years in the latest deals concluded last week. Most of these transactions were concluded from the US, where domestic
scrap demand is very low and exportable
scrap cargos are plentiful. In these ex-US transactions to
Turkey, deals for HMS I/II 80:20
scrap were concluded at $250/mt CFR, down $15-18/mt compared to the previous week.
Currently, the import price of ex-Australia 62 percent Fe content iron ore have dropped to $61-62/mt CFR China and ex-
Turkey rebar offers have started to range at $450-460/mt FOB, the lowest levels since 2009. Meanwhile, ex-US prices for HMS I/II 80:20
scrap had started the New Year at approximately $320/mt CFR, since then decreasing to $250/mt CFR, a level last recorded in March 2009, with these ongoing decreases creating nervousness in the Turkish market. The latest price level was last seen in the recovery period in 2009, following the economic crisis in 2008, with prices generally registering an uptrend afterwards. However, in October 2008, ex-US
scrap prices were at $250/mt CFR early in the month and decreased by nearly 50 percent during the month to $130/mt CFR. We have shown two cases here when ex-US
scrap prices were at the level of $250/mt CFR, but subsequently moved in opposite directions - dropping sharply in one case and gradually increasing in the other. As no improvements are expected in the global finished steel market in the short term, import
scrap prices are likely to continue their downward movement, while market players are also wondering if prices could possibly drop to the lowest level seen during the crisis, i.e., to $130/mt CFR.
Since
scrap suppliers, especially in
Europe and the CIS, have many cargos available for sale, Turkish steel producers still hold the advantage when asking for reductions in
scrap transaction prices. Meanwhile, finished steel buyers in the global markets are cautious about concluding deals amid decreasing import
scrap prices and with the weak demand/low price situation still continuing. Also, billet suppliers continue to cut their offers to the Turkish market due to the pressure of decreasing import
scrap prices. Turkish steel producers are likely to receive the reductions they ask for in
scrap prices amid the negative outlook in the global finished steel markets and high
scrap supplies. A steel producer in the Iskenderun region of
Turkey is reported to be holding a
scrap tender and the result of the tender is expected to give direction to the imported
scrap market in
Turkey in the coming days.