Turkish scrap markets on hold again

An atmosphere of calm has dominated the Turkish scrap markets since last week. Turkish producers, pursuing a policy of first selling their products and then purchasing scrap, delayed their scrap purchases due to the weak state of the product markets and the recent decline in product prices. While no softening is observed in deep sea scrap offers, Turkish producers have put serious pressure on the prices of small-tonnage scrap ex-Algeria, Israel and Lebanon. It is heard that a Turkish mill has given a counter-offer at $247/mt CFR Marmara, which is even lower than $250/mt. However, no supplier has been able to lower its price to this level. Producers are also trying to put pressure on A3 grade scrap ex-Black Sea. Although the Russian domestic market is strong, Turkish mills are reported to be giving bids at around $270/mt CFR Turkish ports. There were a few bookings concluded at $270/mt CFR Marmara level last week. However, it is reported that the suppliers who lowered their prices to this level suffered losses. The fact that freight rates in the Black Sea have risen by around $5/mt causes difficulty to Black Sea scrap suppliers, who were already having trouble finding ships. The price for A3 grade scrap in the Turkish market should be at around $277-278/mt CFR; however, Turkish mills even avoid getting closer to this level. Last week, only one booking was concluded regarding deep sea scrap. The price of this booking was very low due to buyer's guarantee of a high discharge rate (9,000 mt daily) and the supplier's need for prompt sale. The price levels of offers for deep sea scrap this week are forecasted as follows:

HMS I/II 80:20      : $274-275/mt CFR Turkish ports   
HMS I/II 70:30      : $269-270/mt CFR Turkish ports     
HMS I/II 60:40      : $265/mt CFR Turkish ports     
Shredded scrap      : $278/mt CFR Turkish ports 

It is matter of concern when the Turkish mills - which have not yet completed their December purchases - will start buying again. In the last few weeks, other markets, such as Italy and Egypt have been active in their scrap purchases. The fact that other markets are already busy buying scrap lowers the possibility of serious declines in scrap prices in the Turkish market.