The strong upward trend in worldwide scrap prices, which had been continuing since the beginning of this year, finally began to undergo correction around two weeks ago. The subsequent decline in scrap prices (which are used to determine the surcharges in the US) and the availability for export of large scrap inventories in the US have resulted in an upsurge in the number of US scrap offers for Turkey.
On the other hand, the high level of the €/$ exchange rate and the strong state of the European market has caused European scrap prices on a US Dollar basis to follow a horizontal trend and are making it difficult for scrap offers ex-Europe to compete against scrap offers ex-US. However, the fact that there are many offers for cut-grade scrap ex-US available in the Turkish market escalates the competition among suppliers of US scrap, thus causing the price of US scrap to decline. In the bookings concluded towards the end of last week, P&S scrap ex-US found a buyer at $359.5/mt CFR Marmara, shredded scrap ex-US at $354.5/mt CFR Marmara and HMS I/II 80:20 scrap ex-US was at $349.5/mt CFR Marmara.
Meanwhile, the offer level for A3 scrap ex-Black Sea is at around $345/mt CFR. However, no booking at this level has been concluded yet.
Small-tonnage HMS I/II 70:30 scrap ex-Israel is being offered at $330-335/mt CFR, while HMS I/II 80:20 scrap ex-Lebanon is being offered at a level of $335/mt CFR.
It is thought that prices will decline further in the Turkish market as long as a continuation is seen of the abundance in scrap offers ex-US and of the competition between the US suppliers. We predict that ex-US cargoes, which will increase the scrap supply in the market, will be sold this week, due to the decline in prices. What will happen next will be determined by the state of supply in the market.