Having delayed their scrap purchases for a long time due to the fact that they could not foresee the market situation, Turkish producers have finally convinced that the scrap prices will not likely drop further and they have started to buy scrap again by slow degrees. After the Far Easy producers' acceptance of ex-deep sea scrap offers at the price level of $285/mt CFR, the Turkish producers have accepted the same region scrap at the same price levels - as a matter of fact that the ex-deep sea scrap supply is not so strong.
In the earlier days of the last week, an ex-US scrap deal was concluded at the price levels of $276.5/mt CFR Turkey for HMS I/II 80:20, at $281.5/mt CFR Turkey for shredded scrap and at $286.5/mt CFR Turkey for P&S scrap. Thereafter, in the purchases towards the ending days of the last week, the price levels of 280$/mt CFR Turkey for HMS I/II 80:20, $285/mt CFR Turkey for shredded scrap and $290/mt CFR Turkey for P&S scrap has been accepted by the Turkish producers. Considering the fact that the freight cost between the USA's East Coast and Turkey is around $17/mt, the approximately FOB price levels of the abovementioned prices are as follows: $263/mt for HMS I/II 80:20, $268/mt for shredded scrap and $273 for P&S scrap. In this week, it is observed that there are some negotiations for the similar price level in the market.
Deals for ex-European HMS I/II 70:30 scrap were concluded to tje Turkish producers at a price level of $273/mt CFR ($260/mt FOB Belgium) last week. Although the euro and the US dollar exchange rate have this week increased slightly compared to last week, no reflection of this movement to the ex-European scrap offers has been observed yet.
Looking at the Black Sea region, although the A3 grade scrap supply is quite low for the time being, offers from this region are currently at the price levels of $275-280/mt CFR. However, the price idea of the Turkish producers' (who would like to drop their average scrap buying price levels) is at the lower price levels compared to the abovementioned: around $260-265/mt CFR. Freight costs from Rostov are currently at around $20/mt, whereas the same cost is at around $14/mt from Romania.
Some deals of ex-Algeria HMS I/II 70:30 scrap have past week been concluded at the price levels of $240-250/mt CFR Turkey.
It is expected that the Turkish producers will continue to buy scrap with slow degrees in order not to increase the prices and they monitor the finished steel markets furthermore. The future developments in the finished steel will remain as the main factor behind the scrap purchase strategies.
As SteelOrbis, we wish success to all our readers in 2009 and hope the markets to find balance as soon as possible.