Having been on a decreasing trend for a long time now, the continuing decline in scrap prices in Turkey is causing Turkish mills to delay their scrap purchases as they wait for prices to hit bottom. As it is difficult to forecast the future development of the markets due to the sluggishness seen in the billet and rebar markets, mills prefer to be cautious in their scrap purchases and so avoid losses due to further scrap price cuts. Some mills have even halted or reduced their production. Over the past week, hardly any bookings were reported to have been concluded in the scrap markets. At the current juncture, it is still not certain whether Turkish mills will conclude scrap purchases before the upcoming religious holiday (starts September 30) or whether they will instead wait to examine the state of the finished steel markets after the holiday.
The price level in the Turkish market for the most recent ex-US booking, heard two weeks ago, was at $360/mt CFR. This week it is heard that offers from ex-US scrap suppliers to Turkish mills have remained at this level. Meanwhile, in recent weeks, ex-US scrap suppliers have been gaining some relief by performing sales to mills in the Far East.
With scrap supplies showing strength in the European market, European scrap suppliers are waiting for the Turkish mills to start purchasing again. Meanwhile, it is heard that Turkish mills have offered a counter bid to ex-Europe suppliers for HMS I/II 70:30 at the level of $300/mt CFR. Again, it is heard that Turkish mills have made a counter bid for HMS I/II 70:30 scrap ex-Algeria at the level of $250/mt CFR Turkish ports.
Rumors are circulating that ex-Russia A3 grade scrap, which had long been unable to compete with ex-deep sea scrap due to its higher prices, has recorded a decline to Turkish market levels and is now standing at $340/mt CFR Turkish ports.
Nevertheless, against the background of the fluctuations observed in the financial markets and also in the steel markets, it is hard to make predictions about the scrap markets in the short term. It is still unclear whether the sharp increase in oil prices seen in recent days will continue or otherwise, and what effects will be seen in the steel markets if the price increase does continue. As mentioned in our introductory paragraph, it is still not certain whether the Turkish mills will make scrap purchases ahead of the religious holiday (if they believe prices have hit bottom), or whether they will determine their scrap purchasing strategies by examining the finished steel markets after the holiday is over.