In the past week, scrap prices have seen significant increases in line with the demand coming from Turkey. Demand from Turkish steel producers is seen to continue, albeit now at a slower pace. Currently, scrap offer price levels do not appear to be very acceptable when steel product prices are considered.
Ex-US HMS I/II 80:20 prices increased to the level of $360/mt CFR in last week's bookings. Toward the end of last week ex-US HMS I/II 80:20 offers were observed to increase to $375/mt CFR, but no bookings were confirmed at this level. In the US domestic market, scrap collection activities have become relatively harder due to the extremely hot weather conditions. With the effect of this decline on the supply side, scrap prices for August are expected to show an increase of $20-30/mt. It is thought that ex-US HMS I/II 80:20 offers to Turkey for this week will be in the range of $375-380/mt CFR.
It is heard that a Turkish steel producer has confirmed an ex-UK HMS I/II 80:20 price at the level of $371/mt CFR. Along with the increases in international prices, the increase in the strength of the euro against the dollar is another factor which has played a role in the increase of ex-UK scrap prices.
In Turkey, an ex-Romania booking for A3 grade scrap was concluded at $363-365/mt CFR in the past week. Today, scrap collection prices in Romania have reached $335/mt. It is difficult for offers to Turkey for scrap collected at these levels to drop below $375/mt CFR. In fact, yesterday an offer from a trader was heard at $380/mt CFR, but it appears hard for this price level to find acceptance in Turkey.
Turkish producers have not yet exited the market; however, they are seen to be experiencing difficulties in accepting the current price levels. Nevertheless, with the decline in scrap supply, a softening in scrap prices appears unlikely.