The continuing delay of scrap purchases by Turkish mills is currently not exerting any downward influence on scrap prices.
As mentioned in our previous analyses, an increase in US scrap prices was seen in the past week, with the price level of shredded scrap rising by $65/lt ($63.97/mt) to $300/lt ($295.26/mt). This uptrend has made the local market more attractive for US scrap suppliers and has increased the possibility of sales of scrap supplies (which are currently not that strong) to the local market. In this connection, it is observed that ex-US scrap prices are increasing in Turkey. It is heard that last week's scrap offers of ex-US HMS I/II 80:20 at around $315/mt CFR are not valid anymore, with a new price level of just below $320/mt CFR now being heard.
Ex-Europe scrap offers to Turkey have also registered an uptrend in the past week, in parallel to the price uptrend in the local European markets. Thus, it is heard that ex-Europe HMS I/II 70:30 scrap offers to Turkey are currently at around $310/mt CFR Turkey.
While ex-Black Sea A3 grade scrap offers are at $305-310/mt CFR Turkey for the time being, these prices (which seem much better compared to ex-deep sea offers) are not attracting any greater degree of interest from the Turkish mills. The price idea of Turkish mills in the Marmara region is at below $300/mt CFR. However, it seems very difficult for even the bare cost of ex-Black Sea A3 grade scrap delivered to Turkey to go down to this level.
In the Turkish domestic steel market, it is mentioned that Turkish mills will decrease their production operations by one shift. However, market players think in general that even the decreased production rates will not affect scrap prices so much. While Turkish mills have not purchased scrap for January shipment yet, they have now limited time (i.e., only two weeks) left to switch to purchase mode, especially as the Christmas holidays and the increasing impact of the winter season will reduce scrap supplies (already at low levels) further. On the other hand, having previously considered that the early November scrap price of $260/mt CFR was very high, it seems that the Turkish mills will struggle to purchase scrap at the abovementioned current price levels unless they manage to achieve a healthy supply-and-demand balance on the finished steel side.