Strengthening long steel prices pull Turkish scrap market upwards

In the past week, import scrap prices in Turkey have recorded a sudden increase due to strong demand, despite the weakening of the euro against the US dollar. In the Turkish domestic market, long steel demand has risen in line with the increased activity on construction projects ahead of the general elections which will be held on June 12. This has lead to an increase in demand for scrap from the Turkish mills.
 
Ex-US HMS I/II 80:20 scrap offers to Turkey, which were standing at $460/mt CFR early last week, switched to a rapid increase trend as of the middle of last week. As a result, in ex-US scrap bookings, the transaction price for HMS I/II 80:20 scrap rose to $473/mt, while the price of shredded scrap reached $478/mt CFR and the P&S scrap price increased to $483/mt, CFR. As of today, ex-US HMS I/80 scrap is being offered to Turkish mills at $480/mt CFR.
 
Similar increases have been seen for ex-Europe scrap prices. Last week, an ex-UK HMS I/II 80:20 scrap transaction was concluded at $465/mt CFR Turkey. Although no new offers have been heard so far this week, it is thought that offers for HMS I/II 80:20 scrap will not remain below $470/mt CFR.
 
In the latest ex-Black Sea A3 scrap transaction to Turkey, prices were at $465-470/mt CFR. SteelOrbis has learned from market sources that, while current offers for A3 scrap offers from this region to Turkey are at $475/mt CFR, Turkish mills have not accepted this price level for the time being.
 
The scrap price increases observed in the market, despite the lack of any supply shortage and the weakening of the euro, have resulted only from Turkish mills' strong demand for scrap. Considering current finished steel prices, the price increase rate observed in the finished steel market is significantly higher as compared to the price increase rate for scrap. Consequently, as long as Turkish mills continue to show strong demand for scrap, scrap price hikes will inevitably follow.