In previous weeks, in spite of the decreases in finished steel prices, scrap prices did not decline by the desired margins, leading Turkish producers to delay their purchases considerably. However, last week finished steel prices showed a slight recovery against the background of a certain rebound in demand in the finished steel markets. As a result, the Turkish producers, who had kept their scrap inventories at low levels and even directed their attention to billet purchases, have returned to the scrap markets again.
Many bookings are reported to have been concluded in the scrap markets which continue to show the activity that had started to be observed towards the end of last week. For now, scrap prices have this week been moving on a neutral trend, following the rebound they recorded approaching the end of last week. In the latest scrap bookings concluded by Turkish mills, the price of ex-US HMS I/II 80:20 scrap is in the range of $212-220/mt CFR, the price of shredded scrap is at the level of $217-225/mt CFR, P&S scrap is at $230/mt CFR and ex-continental Europe HMS I/II 70:30 scrap is in the price range of $213-215/mt CFR.
Looking at the Russian domestic market, scrap suppliers are heard to have had difficulties in obtaining payments. With scrap suppliers in this market preferring to sell their materials to the export markets instead of offering them to their local market, the supply level on the export side has increased and the prices of ex-Russia A3 scrap, which had not able to compete with ex-deep sea scrap prices for a long time, have finally decreased to competitive levels. In recent days bookings have been concluded in the Turkish market for ex-Russia A3 scrap at the level of $210-215/mt CFR.
Turkish mills are still in the market for scrap purchases; however, they have been experiencing some difficulties in terms of finding acceptable ex-deep sea scrap offers for shipments to be made in the first half of April. At the current juncture, Turkish mills should show caution as regards scrap purchases; in particular they should closely observe the direction of the finished steel markets and should also consider the possibility of a rebound in scrap supplies with the approach of the spring season. Specifically, if the Turkish mills move to purchase significant tonnages of scrap in the short term, this could cause a further increase in scrap prices also in the short term. It is expected that the direction of the finished steel markets will continue to be critical for Turkish mills' scrap purchases for a while to come.