The previous long-standing decreasing trend of scrap prices has been replaced by a rising trend following the news of the reduction in the US duty on steel imports from Turkey from 50 percent to 25 percent. Having been at $282/mt CFR Turkey towards the beginning of last week, deep sea HMS I/II 80:20 scrap prices reached $294/mt CFR Turkey as of the end of last week after the US decision to reduce the duty in question.
The US announcement early on Friday, May 17, to cut the duty to 25 percent has attracted a very positive reaction from the Turkish steel market, and Turkish mills have temporarily stopped sharing offers as in particular they first want to talk with their customers in the US. However, within the scope of the US-Mexico-Canada Agreement (USMCA) the US announced on the same day the cancellation of the Section 232 tariffs on steel imports from Mexico and Canada. While Turkish steelmakers have continued negotiations with US buyers over the hikes they have already made to their prices as compared to last week’s levels following all the above developments, the trend of the markets is not clear yet.
On the other hand, higher iron ore prices, which have increased above the $100/mt level, are providing support for the uptrend of raw material and steel prices. It is observed that Turkish mills are still making price inquiries for scrap purchases, but before they conclude any new deals they wish to gain a clearer perspective on their future finished steel sales. It is heard that scrap suppliers are retreating slightly from the market for the same reasons, and so scrap supply in the market is lower week on week.
SteelOrbis has heard that deep sea HMS I/II 80:20 scrap offers to Turkey from Europe and the Baltic region today, May 21, are at $300/mt CFR and 305/mt CFR, respectively. Although the decrease in the euro-dollar exchange rate to $1.11 level has created an opportunity for European suppliers, they are also suffering from the uncertainties surrounding scrap collection prices. Turkish steel mills are not expected to be in any rush to conclude new scrap bookings, while they are foreseen to determine their scrap purchasing strategies in line with the unfolding of developments in the US market.