As the Ramadan holiday comes to a close, many US scrap exporters are anticipating Turkish producers to return to the US scrap market. This could stand to benefit US exporters, because there is a belief that scrap inventory levels at Turkish mills are running extremely low. As one US trader put it, "they should be seeing dirt very soon".
A dropping US domestic scrap market is another reason to believe that Turkish buying will resume in the near future. US domestic scrap prices shot up $20/lt for HMS and has since dropped back to August levels. Many in the industry expect prices to retreat by as much as $20/lt more in the short term. An increase in finished product demand sparked by the end of the Ramadan holiday, low inventory levels, and a falling US domestic price are all indications that Turkish buying activity on the international market should increase. Offer prices as of early this month for ex-US scrap to Turkish producers was heard at $390-$395/mt CFR HMS I/II 80:20, which reflects a $10-$15 month-on-month decline.
Far Eastern consumption of US scrap has slowed as of late. Recent mill shutdowns in China due to governmental regulation and discrepancies between supplier and buyer offers has lead to a slow scrap import market. Current US offer prices for containerize ex-US HMS I/II are heard at $370-$375/mt CFR Taiwan with inquiries heard at $360-$365/mt. With a proposed $4-$6/t increase in container freight rates next month, margin conscious US suppliers are hesitant to lower prices.