Despite the declining trend in scrap prices, demand coming from Turkish steel producers is not that strong. Turkish mills prefer to see consistency in the product markets first; however, that consistency is yet to be achieved.
We have observed a further drop of prices in the bookings concluded last week. The price of HMS I/II 80/20 in Turkey has dropped from the level of $325/mt CFR in August to $300/mt CFR at the end of September. In the period in question, the low demand coming from buyers, namely, the Far Eastern and Turkish steel producers, led to a downward movement in scrap prices. Bookings concluded by both the Turkish and the Far Eastern steel producers have remained very limited, and this situation is still affecting the scrap market. Turkish producers are this week considering prices of below $300/mt CFR for HMS I/II 80/20.
The state of affairs is not much different as regards scrap ex-Europe. The $20/mt drop observed in the European domestic market has also been reflected in offers to Turkey. The last-heard European HMS I/II 70/30 booking to Turkey has been concluded at $294/mt CFR, down from the level of $317/mt CFR one month earlier.
The situation for A3 grade scrap ex-Black Sea differs a little from the above. A3 grade material ex-Romania is on a downtrend, while Russian origin A3 seems to be more resistant as Russian buyers have been more active lately. Romanian A3 offers this week have moved down from their last week's level of $300/mt CFR to $290/mt CFR. Some Turkish mills are reportedly counter offering at $285/mt CFR; however, so far no deal has been heard at such a level.
Short sea scrap offers such as ex-Algeria and ex-Lebanon currently stand at $275-280/mt CFR.
Now that the Ramadan period is over, Turkish steel producers are hoping to see some activity in the Middle Eastern product markets. Both the expectation that scrap prices will fall further and the still uncertain state of the steel markets in the Middle East are leading the Turkish mills to act cautiously in their scrap purchasing activities.