Falling trend of scrap prices comes to an end

Tuesday, 02 July 2019 18:14:48 (GMT+3)   |   Istanbul
       

The higher demand from Turkish mills observed after ex-US HMS I/II 80:20 scrap quotations fell to $278/mt CFR Turkish ports in past weeks caused foreign scrap suppliers to leave the market. Foreign suppliers remained absent for a week up to Friday, June 28, when the HMS I/II 80:20 scrap price in an ex-UK scrap deal concluded in Turkey was observed to be at $293/mt CFR, indicating a sharp increase of $15/mt. As a result, the downtrend of import scrap prices in Turkey has come to an end, being replaced by an upward movement.

Market sources state that US scrap suppliers have not given offers to Turkey in the past week as they adopted a wait-and-see stance. Also, the quiet activity as regards ex-US scrap is expected to continue in the current week due to the July 4 holiday, while new ex-US offers may be heard next week.

On the other hand, HMS I/II 80:20 scrap was transacted at $297.5/mt CFR Turkey in the bookings concluded in the current week from the Baltic region and Russia.

It was observed that the scrap collection costs were at low levels last week. However, US scrap suppliers do not have the tonnages they need to meet their previous commitments and the expectations of a $10-20/mt fall in the local US scrap market in July have changed to expectations of sideways movement. As a result, scrap collection costs are foreseen to move up.

Meanwhile, European scrap suppliers are not offering any cargoes to Turkey amid higher scrap collection costs resulting from higher scrap quotations and also as iron ore prices have exceeded $120/mt CFR.

Moreover, suppliers in the Baltic region and Russia are targeting levels of $300/mt and above for HMS I/II 80:20 scrap sales, market sources state, adding that short sea activity is also quiet as regards offers to Turkey.

Meanwhile, finished steel buyers are maintaining a wait-and-see stance as they are not sure if this upward trend of scrap prices will continue. Considering that scrap prices may increase further, Turkish mills have raised their rebar export prices to $470-480/mt FOB in the current week.


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