The drops observed in
Turkey's
scrap import prices amid the long-standing sluggishness in the global steel markets and declines in iron ore prices have been reflected in Turkish domestic
scrap prices this week, raising expectations for further
scrap price cuts among market players.
On the other hand, after the Chinese government last week approved new investment projects, the market mood has improved and iron ore prices have increased by about $5-6/mt since the weekend, after the significant drops registered in previous weeks. The positive mood has also been felt in the Turkish finished steel market and demand has shown some improvement today, September 11, following a fairly silent period.
The positive news coming from
China has inspired different expectations regarding how
scrap prices will be affected. Some
scrap suppliers have immediately tried to increase their prices, while Turkish mills are opting to keep an eye on developments in
China first. While Chinese steel producers are expected to reduce their activity levels in the export market and return to their own domestic market, it is foreseen that this will take some time to happen. In the meantime, steel producers in other markets are trying to figure out if the market will really react positively during this period. Consequently, it is yet to be seen if the Turkish market will react positively in the short term.
In the past week, ex-
US scrap prices have continued their downtrend, with the price of HMS I/II 80:20 declining to $388/mt CFR
Turkey in the latest transaction heard. After the declines in the Turkish domestic
scrap market, Turkish mills' price expectation for ex-
US HMS I/II 80:20 is no longer above $380-385/mt CFR.
On the other hand, ex-
Europe scrap suppliers have been facing difficulties lately, with the euro/dolar exchange rate reaching 1.28. In the latest ex-
Europe scrap transaction to
Turkey, of which details have been reported by SteelOrbis, a cargo including HMS I/II 70:30, shredded
scrap and P&S
scrap has been bought at the average price level of $380/mt CFR
Turkey.
In latest ex-Black Sea
scrap bookings in
Turkey, the price of ex-
Romania A3
scrap stood at $370/mt CFR Marmara Sea ports.
If
China's new investment projects really affect the steel markets in a positive way as expected, the market mood and market activity is expected to improve. However, the Chinese mills will need some more time to switch their focus to their domestic market.