In recent weeks scrap prices indicated a gradual increase due to strong demand coming from the Far East and from the Turkish mills and also due to tight scrap supplies. While a slowdown in scrap demand has recently been observed in China, this week similar slowdowns have also been seen in other markets. It is observed that Turkish mills are in no hurry to buy scrap for the time being.
Last week ex-US HMS I/II 80:20 scrap deals were concluded at $322-324/mt CFR Turkey, whereas it is heard that the same material has this week kept its price and is currently at around $325/mt CFR Turkey. In the US domestic market, it is expected that HMS scrap prices will increase by $15/mt in September. Mills are returning to work after the holidays in the US and in Europe and scrap demand still exists in these regions despite the ongoing tightness of supply; these are the main factors behind the expectations of a price uptrend in the US. On the other hand, there is growing concern in the international markets due to the high levels of finished steel inventory in China, the downtrend in Chinese finished steel prices, and due to the absence of the Chinese producers from the scrap markets. Following the price decrease in the local Chinese steel markets, Chinese producers are now expecting to see a certain correction in import scrap prices.
In Turkey, ex-Europe HMS I/II 70:30 scrap prices are stable at $316-317/mt CFR Turkey.
Meanwhile, it is observed that ex-Black Sea scrap prices have registered an increase compared to last week. While a deal for A3 grade scrap was last week concluded at $317/mt CFR Marmara, it is heard that the same material has this week been offered at $320-325/mt CFR Turkey. However, these levels have not yet been met with acceptance by Turkish producers.
It is thought that the Turkish producers will be calm in their approach to scrap purchases this week even though their scrap needs for September shipment have not yet been satisfied.