Having preferred deep sea scrap bookings last week, Turkish producers are now observed to have finally started to make purchases of ex-US scrap. Being in urgent need of scrap and with insufficient volumes of ex-European scrap available to cover their needs, Turkish producers have had no option but to buy ex-US scrap.
Last week, the Turkish producers found themselves obliged to buy ex-US HMS I/II 80:20 scrap, which had been offered at $375/mt CFR in early March (on the high side for the producers at the time) at the increased price level of $390/mt CFR. Given the expanding outputs of the mills in the local US market, scrap demand is strong in this market. This week, HMS I/II 80:20 offers to Turkey are heard to have increased by $10/mt from last week's levels to $400/mt CFR and above.
Scrap demand is strong also in the European domestic markets. Especially in Spain and Italy, as a result of increased demand, scrap supply are heard to be insufficient. Thus, the number of ex-Europe scrap offers to Turkey is observed to have decreased.
In line with the global upward trend, ex-Black Sea scrap prices last week increased to levels of $385-390/mt CFR. This week, while A3 scrap offers are heard at about $385/mt CFR, mills have not yet begun to look favorably on these prices.
With increased prices on the product side, although demand continues to be weak in the export markets, demand levels have seen an increase in the local Turkish market. With the spring coming and with halted or slowed-down construction projects starting to resume normal activity, product demand is expected to strengthen. Likewise, with scrap collection becoming easier, scrap supply will register a recovery. Increases in both scrap supply and demand will prevent prices from continuing to rise at their current rate.