Turkish mills’ scrap purchase prices corrected in line with euro-dollar exchange rate

Last week, the euro-US dollar exchange rate reaching 1.49 as well as intense demand from Turkish mills led scrap prices to increase. This week, however, with the influence of the steep decline in the strength of the euro against the dollar beginning from last Friday, May 6, scrap prices have seen some correction.
 
Last week, due to the strength of the euro against the dollar, Turkish producers turned to the US market for their scrap needs. With this increased demand from Turkey, the ex-US HMS I/II 80:20 scrap price rose to $470/mt CFR towards the end of the week, up from $459/mt CFR early in the week. However, since there is no shortage of supply, this demand-driven increase is not expected to continue in the current week. SteelOrbis has learned from market sources that ex-US HMS 80:20 scrap offers are standing at about $470/mt CFR as of today, May 10.
 
The loss of strength of the euro against the dollar as of Friday has provided some relief for suppliers of ex-Europe scrap. In an offer heard yesterday, May 9, the ex-Europe HMS I/II 70:30 scrap price for Turkey was at $439/mt CFR, regressing from $455/mt CFR last week. In the same offer, HMS I/II 80:20 scrap was priced at $450/mt CFR and the shredded scrap price was at $465/mt CFR. It is reported that there are quite a number of offers from suppliers of ex-Europe scrap. Therefore, since these suppliers are having difficulties in selling HMS I/II 70:30 scrap in particular, it is thought that they may cut their price to some extent.
 
Ex-Black Sea scrap prices also continued to increase last week. The ex-Black Sea A3 scrap price, which was standing at $455/mt CFR early last week increased to $465/mt CFR toward the end of the week. Although the scrap collection cost in Romania is still at $430/mt, this week this level is expected to regress.
 
In the past few weeks, the exchange rate of the euro versus the US dollar has heavily influenced scrap prices. Sudden changes in the exchange rate, as they have been observed recently, are foreseen to continue affecting the scrap market. However, for now, considering the current euro-dollar exchange rate at 1.43, as well as European suppliers' willingness to sell and Turkish mills' partly-satisfied scrap needs, a certain softening seems inevitable in scrap prices.