Scrap markets on hold

Scrap markets, where mills and suppliers are in conflict regarding the direction of scrap prices, are calm this week. Last week, we reported that especially suppliers of scrap ex-Baltic Sea concluded sales to Turkish mills for May shipments. The price levels for these bookings were at $269-270/mt CFR Turkish ports. Offers given by suppliers of scrap ex-EU and ex-US, which we call “deep sea” scrap, were at $265-270/mt CFR Turkish ports for HMS I/II (80:20), and at $275/mt CFR Turkish ports for shredded scrap. However, Turkish mills mostly focused on offers ex-Baltic Sea. This week, mills' expectation that the prices would decline further with the opening of Black Sea side still prevails. In fact, certain Turkish mills are heard to have given a break to their purchases in line with this expectation. The existence of Black Sea offers in the market, coupled with the expectation that supply would increase further; caused purchase price indications to decline significantly. However, the situation on suppliers' side is different. Suppliers indicate that the prices will not decrease and the existing prices will retain their levels, perhaps with little declines. On the other hand, while certain market players claim that a sharp decline in scrap prices may have a negative impact on finished steel markets, which still seem to be strong, the current dynamics in the finished steel markets reduce the possibility of a sharp decline in the short run.