Scrap collection activities have been seriously hampered by the difficult winter conditions in Europe and in the east of the US. Scrap collection in the US has decreased by 40 percent in December compared to November, with most buying activity coming from the local market. In December ex-US scrap prices have been too high for Turkish buyers to accept. Instead, the Turkish producers, who have been in buying mode for two weeks now, have mainly preferred ex-Europe scrap.
While a limited number of ex-US scrap offers have been heard in the past week in Turkey, the offers in question, at levels over $325/mt, have not been met with acceptance by Turkish buyers. According to market players, scrap prices in the US are almost certain to increase by at least a further $40/mt in January. Meanwhile, in ex-Europe scrap deals to Turkey, a cargo consisting of HMS I/II 80:20 scrap and shredded has been concluded at $315/mt CFR Turkey, while, in another booking, HMS I/II 70:30 scrap has been concluded to Turkey at $308.75/mt CFR Turkey. While scrap supply in Europe is in general not so strong at the current time, ex-Europe scrap suppliers now have the advantage of the reduced strength of the euro. On the other hand, the price of shredded scrap in Italy is currently at €210-215/mt ($300-307/mt) delivered to customer.
Meanwhile, ex-Black Sea A3 grade scrap is being offered at $315-320/mt CFR Turkey. Although the collecting cost of scrap in Romania is at around $280/mt, offers given to Turkish mills from this country are at around $315/mt CFR Turkey. However, the Turkish mills find the price level of $310/mt CFR Marmara more acceptable, appearing to have difficulty in accepting the abovementioned level of $315/mt CFR.
In conclusion, the Turkish mills, which are experiencing difficulties in obtaining their target prices for finished products, think that current scrap prices are on the high side and find it hard to accept them. However, a decrease in scrap prices is almost impossible due to the upcoming holidays which are due to start this week and also due to the expectations of a further decline in scrap supplies caused by the winter conditions.