Upward trend continues in scrap markets

Scrap prices, which started to rise with the coming of the New Year, have already reached amazing levels. Moreover, the extent to which the prices may continue to increase is now a matter of serious concern. Scrap prices have kept rising with offer levels indicating a $5/mt rise each week. The major factors supporting the increase in scrap prices are the strong state of the local markets in the supplier countries, the limited availability of scrap as a result of strong demand since almost all buyer countries are active in their scrap purchases, and the strong state of the long product markets which are following an upward trend. Looking at the price levels of the bookings concluded by Turkish mills last week, we see that HMS I/II 80:20 scrap ex-deep sea was booked at $314/mt CFR Marmara, while a cargo consisting only of shredded scrap, also ex-deep sea, was booked at $319/mt CFR Marmara. It is reported that the latest bookings of A3 grade scrap ex-Black Sea have reached $316/mt CFR Nemrut. Scrap availability for export in the Black Sea market is very limited with most of the collected scrap being sold in the local market. As of 2006, Black Sea countries have started to lose their position as a net exporter. The CIS, which now concludes exports in very limited amounts, is expected to become a net importer in the coming period, especially with the rising investments in Russia. Although no booking was heard this week, it is said that offer levels have indicated slight increases. Offer levels are at $325/mt CFR Turkish ports for shredded scrap ex-deep sea, at $320/mt CFR Turkish ports for HMS I/II 80:20 scrap, at $307-308/mt CFR Turkish ports for HMS I/II 60:40 scrap and at $315-320/mt CFR Turkish ports for A3 grade scrap ex-Black Sea. Turkish mills are expected to conclude purchases for March loadings as of this week, and if the rise in the long product markets continues, there will not be any expectation of a decline in scrap prices.