We mentioned in our previous analysis entitled, "Prices retreat in the Turkish scrap market," that scrap prices have been on the decrease. The active US local market in March caused a decline in scrap amounts allocated for exports and, as a result, prices climbed sharply. On the other hand, due to the slowdown in the US scrap market in April, the amount of scrap allocated for export has increased again. There are several US scrap offers available in the Turkish market; however, none of these offers appear to have turned into bookings yet. Since the expectation of a further price fall governs the market, Turkish mills are keeping away from the market for the time being. Since there have not been any purchasing requests from the Turkish mills, most of the scrap offers ex-US have been withdrawn. While the Turkish mills expect prices to decline further, suppliers of US scrap expect the Turkish mills to return to the market for purchases. Meanwhile, a sale of high-quality scrap has been concluded from the US East Coast to the Far East at $366/mt CFR level (freight rate at around $72), since the demand in the Far East is strong and there is no scrap available on the US West Coast.
On the other hand, the high level of the €/$ exchange rate is having a great impact on scrap ex-Europe, creating a certain amount of uncertainty.
The price of A3 scrap ex-Black Sea in Turkey has been rapidly declining with the emergence of ready-cargoes at Black Sea ports, each new booking being concluded at a lower price than the previous one. The latest booking is heard to have been concluded at $325/mt CFR Turkey level.
Since there is deficit in the Turkish mills' May purchases, it is thought they will recommence scrap purchases soon.