With Turkey, the world's number one scrap purchaser, suspending its scrap purchases and staying away from the market, there has been growing uncertainty over the levels of scrap prices.
After registering a very limited number of bookings over the past several weeks, many varying reports have been heard about scrap price levels and the smallest tonnages of scrap have come under the most intense pressure.
In recent weeks in Turkey, ex-US scrap prices on a CIF basis have been stable (HMS I/II 80:20 standing at $725-730/mt CIF Turkish ports). Meanwhile, because of the increase seen in freight costs, some prices on an FOB basis have decreased by approximately $15/mt. The US factory bundle tenders were awaited with interest in the hope that they would give an indication of the price trend; however, there was general disappointment when Chrysler failed to issue scrap prices for June. With it being estimated that bids have registered an increase of $50-60/mt due to the reduction in automotive production as well as the decrease in the supply for factory bundles, nevertheless no clear comment can be made currently because of Chrysler's new sales policy.
In the US in May, shredded scrap was on a stable and even on a slight downward trend, with no problems being registered in supply; as regards June, it is thought that shredded scrap will follow a stable trend.
Ex-Black Sea A3 grade scrap can be seen at many different price levels. A number of small and large tonnage bookings ex-Black Sea were concluded in the range of $705-710/mt CIF Turkey, while suppliers with scrap aboard ship have decreased their prices below the level of $700/mt CIF. In fact, some Turkish producers have offered counter bids at a level of $680/mt CIF Marmara.
In the markets, which are currently characterized by so much uncertainty, the next few bookings will enable the formation of a clearer idea regarding prices. Meanwhile, Turkey's billet and longs markets are continuing their strong trends.