An increasing movement has been observed in scrap prices, under the impact of the long-awaited buying activity by Turkish steel producers as well as due to the influence of a certain revival of demand in the global markets. Last week, while many steel producers were in the market to purchase scrap, only a few bookings were heard, basically as the limited scrap offers available were found to be too high on the buyers' side.
The price of HMS I/II 80/20 scrap was seen to surpass $265/mt CFR last week, compared to the level of $258/mt CFR the week before. This week the price has increased even above the level of $270/mt CFR. Demand for US scrap from the Far East has also increased, with US scrap cargoes booked by Chinese steel producers at around $310/mt CFR.
HMS I/II 70/30 scrap ex-Europe has increased from its previous level of $253/mt CFR to $268/mt CFR, for shipment to Turkey.
Russian A3 scrap appears to remain out of the market as offer levels seem too high. The price idea of suppliers is at around $280-285/mt CFR which is found too high by Turkish producers. Although the collecting cost of scrap in Romania has moved up to $240/mt, there are still offers available for A3 scrap ex-Romania to Turkey which remain lower than the Russian offers. Offers at around $275-280/mt CFR are heard.
Turkish steel producers are not happy about these recent hikes, as demand on the product side is not strong enough to compensate them. However, in order to ensure that their production operations can continue without interruption, they are obliged to carry on purchasing. Consequently, they find themselves under pressure in the current situation.