As anticipated previously by SteelOrbis, scrap prices in the local Polish scrap market have declined in July, both at the domestic and export levels. Summer slowness for the former and unfavorable export conditions for the latter are contributing to a perpetual market stillness.
Before July contract closures, purchase prices of mills were standing at around €270/mt delivered for HMS I, around €260/mt delivered for HMS II and around €275/mt delivered for bonus grades. Currently, sources have instead reported lower levels by at least €10/mt, with prices standing at around €260/mt, around €240/mt, and around €265/mt, respectively.
“Everyone is waiting for a big market rise,” a source commented. This possibility, however, doesn’t seem feasible, at least for now, in the local market. Low scrap demand from mills is still weighing on local prices, and the sluggishness of the summer season all over Europe makes us believe that this situation will last until the end of August.
As for exports, collection prices at yards for HMS I scrap have been reported in a range of €255-260/mt, up by around €10/mt compared to last week. The reason behind this rise, which might seem contradictory, lies in the fact that cutting collection prices too much would mean losing scrap inflows for exporters, who need to secure volumes in case of rising demand from import markets. By doing this, scrap buyers, especially from Turkey, might be forced to accept higher prices, as other factors need to be considered - the dollar-zloty exchange rate still being unfavorable ($1 = PLN 3.63), and freights from Gdansk standing at over $35/mt, the highest level of the last few months.
At the moment, however, the import scrap market in Turkey seems to be quiet at unchanged levels compared to last week, with HMS I/II 80:20 in a wide range of $340.5-347/mt CFR. Turkey is waiting for the new decision of its central bank on interest rates, expected tomorrow, July 24. If the anticipated cut materializes, Turkey may be able to raise their rebar prices and therefore accept higher levels for scrap.
