As Turkish steel mills continue to show demand for import scrap, the upward movement of prices recorded in deals is seen to be continuing. After the comments made on July 29 by Chinese Premier Li Keqiang affirming that China is committed to eliminating low-grade construction steel production and outdated capacity, iron ore prices have increased by $5/mt. Following the rise seen in iron ore quotations, which have also provided support for finished and semi-finished steel prices, Turkish steel mills’ demand for import scrap has increased. The scrap deals heard in Turkey are mostly ex-Baltic, while the most recent ex-Baltic and ex-US deals in Turkey for HMS I/II 80:20 scrap have been concluded at $326.5/mt CFR and $327/mt CFR, respectively.
With the local US scrap market maintaining its strength, US scrap suppliers’ offers to Turkey for HMS I/II 80:20 scrap are heard to be at and above $330/mt CFR. Given the current price levels from the East Coast, it is noteworthy that the gap between prices from the West Coast - which mostly exports scrap to the Far East - prices from the East Coast - which mostly exports scrap to Turkey - is increasing day by day.
Scrap flow in Europe has slowed down due to the summer holidays, and also, since the exchange rate has exceeded $1.18 to the euro, European scrap suppliers are still facing difficulties in terms of collection activities and their export prices.
It is heard that Russian suppliers’ scrap offers to Turkey are at $320/mt CFR from the Black Sea region, while Romanian scrap suppliers’ offers to the same destination are in the range of $310-315/mt CFR. SteelOrbis has been informed that Turkish steel mills’ firm bids for Russian A3 grade scrap are at $317/mt CFR. Meanwhile, availability of ships in the Black Sea region is tight due to the ongoing grain season and this situation has resulted in increased freight costs.