It is observed that the Turkish producers, who have quite low stock levels, now need to make scrap purchases; however, with scrap prices remaining unchanged at high levels, the producers are coming under more pressure. Last week, an ex-US HMS I/II 80:20 scrap booking was concluded at the level of $280/mt CFR in Turkey. No change of direction has been heard in the market this week, with offers for ex-US HMS I/II 80:20 scrap standing in a price range of $280-285/mt CFR ($263-268/mt FOB).
Slow scrap collection activities due to the holiday period and heavy weather conditions have removed the expectations of a decrease in scrap prices. Meanwhile, current price levels of scrap have been applying pressure on the finished steel side and lowering the possibility of a decrease in finished steel prices. Should no suitable level be found to allow the recovery of scrap costs, Turkish mills will have to cut production further.
The exchange rate of €1 to US$1.33 has prevented ex-Europe scrap prices from increasing and this has provided relief for the market. It is heard that offers for ex-Europe scrap have been standing at $260/mt FOB, remaining unchanged as compared to last week.
Against the background of the increased danger at Ashdod port in the context of the current Israeli-Palestinian strife - though no great change has been observed in activities at the port - ex-Israel HMS I/II 70:30 scrap offers have been raised to the level of $260/mt CFR. It is thought that ex-Israel scrap inventories may decrease over a certain period.
Due to the ongoing holidays in Russia, no ex-Russia scrap is being offered to Turkey. Meanwhile, ex-Romania scrap offers for A3 grade have been at the price range of $280-285/mt CFR.
It is observed that the Turkish producers are currently in the market to buy scrap on account of their declining stock levels; however, they are also seen to be acting very carefully as they are considering the conditions in the finished steel market. Among market players there is an expectation that there may some scrap deals in the market this week.