Turkish mills refrain from booking scrap

In recent weeks, scrap demand from Turkish mills had increased in line with stronger finished steel demand. However, this week the scrap booking activity of these mills has been quieter. The slowdown in finished steel demand in the Turkish domestic market and the softening of finished steel prices are the main reasons why Turkish mills have refrained from scrap purchases.
 
After an ex-US scrap booking in Turkey consisting of HMS I/II 80:20 scrap, shredded scrap and P&S scrap was concluded at $485/mt CFR last week, there have not been any other bookings heard since from the US. SteelOrbis has learned that this week a US scrap supplier has offered HMS I/II 80:20 scrap to Turkey at $480/mt CFR, while its offer for shredded scrap has been at $485/mt CFR. However, it is learned that Turkish mills are not inclined to pay these prices.
 
Towards the end of last week, an ex-Europe HMS I/II 70:30 scrap booking was concluded at $458/mt CFR. In addition, another European supplier has offered HMS I/II 70:30 scrap to Turkey at about $460/mt CFR . This offer has not yet evolved into a transaction. However, it is thought that this offer may see a revision this week due to the strengthening of the euro against the US dollar.
 
Last week, some ex-Black Sea A3 scrap transactions to Turkey were concluded in the price range of $463-470/mt CFR. While it is heard that ex-Romania A3 scrap offers to Turkey this week stand above $470/mt CFR, Turkish mills are not expected to accept this price level for A3 scrap.
 
In the absence of any weakening in scrap supplies, the scrap price hikes observed in recent weeks have been very closely linked to the sudden finished steel price increases in the Turkish domestic market , which allowed Turkish mills to pay more for scrap thanks to the higher increase rate seen for finished steel prices. Meanwhile, a price softening in finished steel will first cause Turkish mills to delay their scrap purchases; and, if finished steel prices continue to decrease, then these mills will seek to cut their scrap purchase prices. This week, as Turkish steel producers are trying to gauge the extent of the price softening in finished steel, they are not expected to be active in booking scrap. On the other hand, the absence of the mills from the scrap market will exert pressure on scrap prices.