The Russian scrap market has been rather happening in the second half of July. The price trend at the mills’ side has been reversed after a while of a downturn, while the exporters first set the higher purchase prices and decreased them by the end of the month, most probably following the downtrend in the Turkish market, seen in the last couple of deals.
On the mills’ side, the purchase prices were confidently decreasing until the end of the past week, resulting in the certain deficit of the incoming volumes at some mills. After that the producers, aiming to secure the scrap volumes, have started to correct the prices upwards, reaching $338/mt (RUB 24,700/mt) CPT in the Central region and $352/mt (RUB 25,700/mt) CPT in the Ural region. Market players report that the scrap collection in the last week of the month has decreased by 25-30 percent as compared to June since some of the suppliers did not believe the downturn will be sustainable and decided to hold back the scrap volumes at the yards.
On the exporters’ side, the traders the maximum purchase price hit $358/mt (RUB 26,100/mt) CPT with a further decline to $341/mt (RUB 24,900/mt) CPT and then to $315/mt (RUB 23,000/mt) CPT, set by some buyers. Still, the level of $342/mt (RUB 25,000/mt) CPT is present in the market as a special price, sources say.
The situation in the global scrap market is also set to cool off the pricing by Russia’s exporters since the deal prices in Turkey have decreased from $485/mt CFR last week to $469/mt CFR in the most recent deal for HMS I/II 80:20. Moreover, the mentioned deal is for the cargo to be shipped from St. Petersburg. Another issue, affecting the exporters’ actions, is the increased freight rates, which “eat” a good part of the sellers’ margins.
