Rising scrap prices not yet accepted in Turkey

Tuesday, 05 May 2009 16:44:13 (GMT+3)   |  
       

Spending the last week in wait-and-see mode, Turkish producers did not show any interest in ex-deep sea scrap but focused on small tonnage purchases instead during the week in question. The Turkish producers have still not got rid of their nervousness. In the last week, they focused on the Egyptian rebar price announcement, as they did not want to decide on their scrap purchase activity before learning how competitive they would be in Egypt. Although Turkish rebar producers have been pleased with the price increase announcement made by Egyptian producers on May 1, the price increase in question has not been reflected in Turkish producers' prices yet as there has been no increase in demand from Egypt so far. This situation is pushing the Turkish producers to adopt a cautious approach in scrap purchases although they are in need of scrap.

In Turkey, ex-US HMS I/II 80:20 offers have registered an increase this week to price levels of $265-270/mt CFR; however, these levels have not been accepted by Turkish producers yet.

Last week ex-Black Sea A3 grade scrap deals were concluded at $256/mt CFR Marmara and at $260/mt CFR Nemrut; meanwhile, it is heard that this week's offers have registered an increase and are currently at around $260-265/mt Marmara.

With ex-Algeria HMS I/II 70:30 offers standing at $245-250/mt CFR Turkey, it is heard that there have been some deals for small tonnages concluded at these levels.

Another critical issue for the future of scrap prices will be the outcome of the annual iron ore contract talks, which were expected to reach a conclusion in April but which are still ongoing. However, scrap prices are unlikely to decrease in Turkey in the short term, especially when the following points are taken into consideration: shredded scrap prices are currently at around $270/mt CFR in the European local market; in addition, there are some projections that scrap prices in the US domestic market are likely to increase up to $40/lt; furthermore, markets other than Turkey are very active in scrap purchases at the current time.


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