Uncertainty still prevails in the Turkish scrap markets, where there have not been any scrap transactions heard apart from a number of ex-Black Sea A3 grade scrap transactions for small tonnages last week. Although prices have decreased, Turkish steel mills are postponing their scrap bookings, meaning that they expect prices to decrease further.
Although US scrap suppliers, which have been unable to conclude sales to Turkey for a long time, are ready to conclude transactions to Turkey at lower levels than the $395/mt CFR (for HMS I/II 80:20) offer seen last week, there are not any offers heard in the market. US suppliers report that they are ready for negotiations for given firm bids, rather than issuing offers which fail to attract buyers from Turkey. In the US domestic market, lack of demand has caused prices to decline, while US suppliers have not found what they expected in the export markets.
Many ex-Europe scrap suppliers are in the market, while the Turkish steel mills do not want to book at the prices offered by the European suppliers. An ex-Europe scrap cargo composed of HMS I/II 70:30, which had been offered for a long time at the level of $381/mt CFR, is now being put on sale at $379/mt CFR after being revised yesterday. Due to the weakness in demand in the major markets in Europe, such as Germany and Italy, prices in the European domestic market have also started to regress. Even the increase in the strength of the euro against the dollar has not been able to prevent decreases in ex-Europe scrap prices.
Ex-Black Sea A3 grade scrap prices, which had declined to the levels of $375-380/mt CFR last week with transactions seen in this range, have this week decreased further. The latest ex-Romania A3 transaction heard was at $373/mt CFR.
The decreasing trend of scrap prices lead Turkish producers to further delay their scrap purchases. Additionally, finished steel buyers in the international markets also expect finished steel prices to drop further and consequently cause the finished steel demand to get even weaker.