Some Turkish mills that have not purchased scrap for a long time are now observed to be under pressure to buy scrap in order to keep producing in August. However, since demand for finished steel products has somehow not yet awoken and also given the current finished steel product prices, producers are finding it hard to accept current scrap prices.
Meanwhile, due to the demand from the producers in the Far East and from the local US market, ex-US scrap prices for Turkey have not registered any downtrend. It has been heard that in the latest ex-US sales to the Far East price levels of shredded scrap have seen a further slight increase to the level of $345/mt CFR. Considering the current freight rates and the situation in the US scrap market, ex-US HMS I/II 80:20 scrap prices below $285/mt CFR in Turkey are thought impossible for the time being.
Despite the weak demand in the European domestic market, scrap supply has also remained weak in this region. Towards the end of last week a Turkish mill concluded a booking for a single HMS I/II 70:30 scrap cargo ex-continental Europe at $270/mt CFR Marmara. It seems that European scrap prices have not registered any downtrend either but have maintained June levels. Considering the upcoming holidays in Europe, it is thought that Turkish producers are unlikely to find offers with below the level of $270/mt CFR for ex-Europe HMS I/II 70:30 scrap.
On the other hand, price levels of ex-Black Sea offers for A3 grade scrap are observed to have registered an uptrend, whereas they had undergone a slight decrease in previous weeks in some offers for small tonnages. Since scrap collection costs have increased from $225/mt to $235/mt, ex-Romania scrap price levels have risen in Turkey. This week, no offers below the price level of $275/mt CFR have been heard in ex-Black Sea A3 grade scrap offers to Turkey.
Turkish producers' expectations of a revival in the finished steel product markets are being influenced negatively by the gradual approach of Ramadan. Considering the current market conditions and price levels in both the finished steel and scrap markets, the Turkish mills may be inclined to tighten or cut production.