In the last week Turkish producers have returned to the markets with a lot of deals being heard, especially due to the demand activity from the Persian Gulf and Egypt in particular and due to the slight recovery in the finished steel product markets in general. While this sudden, strong surge of demand has not had any impact on local scrap prices in Turkey, nevertheless it has caused import scrap prices to rise.
In the latest deals heard, ex-US HMS I/II 80:20 scrap has been at $230/mt CFR, shredded scrap has been at $235/mt CFR, with P&S scrap at $240/mt CFR. The price of HMS I/II 80:20 has increased to the abovementioned level from $220/mt CFR approximately two weeks ago. The main reason for this rise has been the rapid recovery of demand in Turkey, whereas global demand had been very calm up to then. On the back of the increased demand and higher prices in Turkey - the world's biggest scrap importer with 17.5 million mt of scrap imports annually - Europe has also been influenced, with, for example, scrap prices in the local Italian market indicating a rise of €10/mt. In Turkey, ex-Europe HMS I/II 70:30 scrap price levels have increased to $220-225/mt CFR.
In deals for ex-Black Sea A3 scrap, price levels have been at $225-230/mt CFR. It is observed that there has been an uptrend in the number of deals from Russia due to the increase in the ex-Russia A3 scrap supply and due to the competitiveness of the Russian prices compared to other international suppliers.
We think that it is too early to say that the direction of the wind has changed, i.e. to say that prices have reached bottom levels and have started to increase. If the high tonnage demand continues for at least three or four weeks, then this may be said to be the case. However, the Turkish producers have gained some relief for their stock levels with quick loading purchase activities. Demand from those seeking to buy for May loading may continue; however, it is thought that these producers may show greater caution in their scrap purchases as they consider the demand levels for finished steel products. Yet, with the weather conditions now gradually getting warmer, everybody knows that there will be no trouble as regards the scrap supply.