Even though the scrap demand of the Turkish steel producers have paused slightly from the end of last week, till early this week, they have come back to the market to conclude purchases, particularly after the news about rebar price increases in Egypt.
In the bookings of four to five ex-Europe cargoes, the prices have been observed to have escalated further to reach $317/mt CFR Turkey, for HMS I//II 70/30 scrap.
The scrap supply is tight, against the strong demand worldwide. On top of the Turkish steel producers, demand from Egypt, Vietnam, South Korea, Malaysia and Taiwan is also coming firm. The last deep sea scrap booking concluded by South Korean steel producers, price level has reached $365/mt CFR for HMS I/II 80/20 scrap. Chinese steel producers are not in the market recently, however they are expected to return to the market in the short term for purchasing.
Deep sea scrap keeps climbing trend in Turkey as well. New offers for HMS I/II 80/20 scrap this week have reportedly moved up from last week's booking level of $318/mt CFR, to 325-330$/mt CFR.
Even though the Black Sea scrap prices might seem to be falling at first sight, on the back of slower activity of Turkish buyers, the fact is that they also keep firming up. We see an upward movement for Black sea scrap as no supplier is accepting the lower bids, except for one or two small cargoes booked. After the latest booking made at $315/mt CFR Marmara, today the new A3 offers stand around $317-320/mt CFR.
There is positive sentiment in the markets for the post Ramadan. Scrap sales have already been completed for the Ramadan period, and now post Ramadan shipments are being negotiated. Currently, the world scrap supply is enough to meet the demand only if the steel production runs at 55% capacity. Under these circumstances a possibility of scrap prices to go down in the short run remains weak.