With robust demand registered in all regions across the world, scrap prices are continuing their astonishing upward movement. With each passing day it gets harder to find the morning price levels by the time evening comes and the overall levels prices have reached are a source of amazement to all market players. Having delayed their purchases when prices were hovering at $500/mt CFR, as they were unsure whether scrap prices would move up to even higher levels, producers are now faced with new prices at around $700/mt CFR.
In a booking made in Turkey at the beginning of last week, ex-deep sea HMS I/II 80:20 scrap found a buyer at the level of $679/mt CIF; subsequently, the material in question reached $700/mt CIF in the middle of the week and found a buyer at $715.5/mt CIF towards the end of the same week. It is really interesting to see that prices marked an increase of more than five percent in a single week. With bundle scrap prices having increased by $135/long ton for the month of May in the US domestic market last week, the uptrend in scrap prices marked a further acceleration towards the end of the week. Meanwhile, the Far Eastern and European producers have been active in their scrap bookings. China Steel delayed its purchases upon receiving P&S scrap offers beyond its expectations - at $768/mt CIF in a tender.
Currently, the price for ex-deep sea HMS I/II 80:20 scrap in Turkey stands at around $720/mt CIF. When this price gains acceptance, upcoming offers will exceed even this level and the focus will shift to $725/mt CIF. An interesting point is that the +$5/mt gap between HMS I/II 80:20 and shredded scrap has remained constant since the price of HMS I/II 80:20 scrap was at $350/mt. In addition, the price for P&S scrap still remains $5/mt higher that that for shredded scrap.
With regard to ex-Black Sea A3 grade scrap, bookings have been heard at $705/mt CIF Marmara and $710/mt CIF Nemrut. However, as of today, offers for A3 grade scrap offers in the Turkish market have increased by $5/mt compared to the abovementioned levels.
The latest booking concluded for A3 grade scrap in Greece stands at $715/mt CIF.
The fact that billet and longs prices have soared by approximately $200/mt in the past two weeks may explain why scrap prices have reached their current levels.