Scrap markets, started last week rather calm but got more active towards mid-week with many bookings heard. Similarly this week also started with offer collections, evaluations and negotiations.
In our raw material analysis dated February 23, we mentioned that Turkish mills were hesitant to conclude any purchase with the start of offers to be given by suppliers of Black Sea
scrap. However, Turkish mills later on directed their focus on suppliers of “deep sea”
scrap again as of mid-last week, hesitating whether shipments of Black Sea
scrap could be performed or not. We published the price details of the concluded bookings in our price reports-raw materials section.
This week, there are reportedly many offers heard in the market. The price levels in these offers have been $235/mt CFR Turkish ports for HMS I/II (60:40) ex-
Europe, $240/mt CFR Turkish ports for HMS I/II (80:20) and $245/mt CFR Turkish ports for shredded
scrap. On the other hand, offers for A3 grade
scrap given by Black Sea
scrap suppliers have been around $240/mt CFR Turkish ports for shipment end March/early April. However, it is thought that these prices are found high by Turkish mills and the acceptable price level above $235/mt CFR Turkish ports for Turkish mills is not workable for HMS I/II (80:20). It is estimated that the offers this week will turn into actual bookings as of mid-week, as it was in the previous weeks.
It is observed that Turkish mills are struggling to find ways to reduce
scrap prices, while semi-finished and finished product markets are in panic. In the offers given by Turkish mills for
billet and finished steel products (local and export), a continuous increase has been observed. Since it is not clear whether these prices reflect actual market conditions, and to what extent the prices will increase, many speculations are being made regarding
scrap prices. The future of Black Sea
scrap is among the mostly speculated issues. There many factors affecting
scrap prices, such as whether Black Sea supply will diminish, when the shipments that were prevented by the weather conditions will be in order, whether
Spain will start
scrap purchases actively in March as it was speculated, and how active the
Far East market will be. However, these questions will be answered how supply-demand situation reaches the equilibrium.