While the Turkish longs market has maintained its strength since the start of the New Year, scrap prices, which had made a vibrant entry into 2008, lost their momentum in early February, indicating a decrease on the back of the drop in freight rates. The price of HMS I/II 80:20 scrap had reached its historical level of $460/mt CFR Turkey in the second week of January. Subsequently, prices started to soften gradually and HMS I/II 80:20 scrap fell to the price level of $437/mt CFR in the second week of February. Meanwhile, the prices for long products have indicated a steady increase since the start of the New Year (except for a stable period of a couple of weeks in early February). With the prevalent expectation in the market that scrap prices would soar on the back of this uptrend, there was uncertainty as to when the hike would take place. With the impact of the rise in freight rates due to reports of the imminent conclusion of the international iron ore price talks, scrap prices started to indicate a rise in the third week of February.
In an ex-UK scrap booking to Turkey concluded at the beginning of last week, HMS I/II 80:20 scrap was booked at the level of $439/mt CFR, shredded scrap at $444/mt CFR, P&S scrap at $449/mt CFR, while in another booking concluded on the last day of last week, the price of HMS I/II 80:20 scrap soared up to the level of $453/mt CFR, shredded scrap to $458/mt CFR and P&S scrap to $463/mt CFR. The price rise of $14/mt within a single week attracted considerable interest, with the greatest factor causing this hike being the extraordinary increases in billet and longs prices.
With the gradual commencement of sales for April shipments, there are not many scrap offers in Turkey, both due to the uncertainty as to what extent freight rates will soar in April, as well as due to the expectation that prices will climb up further. Taking into consideration last week's bookings, we estimate that offers for HMS I/II 80:20 scrap will stand in a range of $455-460/mt CFR Turkey this week.
Ex-Black Sea scrap has followed a similar course. In a recent booking, the price of ex-Black Sea A3 grade scrap reached the level of $455/mt CFR Marmara. With the possibility that there might be lower offers based on sellers' individual situations, general offers vary in a range of $450-460/mt CFR Turkish ports.