Having nearly reached the end of their scrap stocks, Turkish mills have started to buy scrap only in line with their needs in order to maintain production. However, they are still avoiding any buildup of excess stocks. The uncertainty in the finished steel markets prevents mills from taking the risk of stocking materials.
It is observed that the Turkish producers (whose stock levels are at very low levels in general) have started to purchase scrap again. In the latest deals, ex-Europe HMS I/II 70:30 scrap has been concluded at $253/mt CFR Turkey, whereas shredded scrap of the same origin has been concluded to Turkey at $263/mt CFR. Meanwhile, deals for ex-Baltic A3 grade scrap have been concluded at $265/mt CFR. Although no ex-US scrap deals have been heard yet, it is estimated that the ex-US HMS I/II 80:120 price levels are at 258/mt CFR Turkey, with shredded scrap at around $263/mt CFR. However, due to the weak scrap demand in the local US market and the lack of expectations for an uptick on the demand side until at least the end of the year, a price decrease of at least $25/mt is foreseen in November in the US domestic market. Thus, in the upcoming days, ex-US scrap offers to Turkey may register a downtrend after the local scrap price announcements which are to be made in the US. Yet, no recovery has been seen in demand from the Far East to the US.
Ex-Romania A3 grade scrap offers in Turkey have been at $255/mt CFR Marmara. However, producers would like to buy at slightly lower prices and are giving firm bids at $250-253/mt CFR Marmara. On the other hand, it is heard that ex-Russia A3 grade scrap offers are currently at around $258-260/mt CFR, higher than the levels for ex-Romania scrap.
It is heard that a lot of producers are in the market this week to buy scrap. However, it seems that scrap purchase activity can only be sustained if the finished steel markets in general gain stability.