Will import scrap prices for Turkey start to soften soon?

Turkish steel producers had completed their scrap purchases for June deliveries with their intensive scrap transaction activity two weeks ago. Last week, there were only two ex-Baltic HMS I/II 80:20 scrap deals heard in the market, in the range of $373-376/mt CFR. Ex-US HMS I/II 80:20 scrap deals were concluded two weeks ago at $374-376/mt CFR, with this price range not having indicated any change since April. According to market sources, Turkish producers are continuing their negotiations with European and US scrap suppliers. 
 
The tight billet availability in the Turkish billet market has continued as a major Ukrainian billet supplier has started to keep its inventories at low levels ahead of maintenance work in the first two weeks of June. In addition, the unresolved political tensions in Ukraine have contributed to the tight billet supply in Turkey. On the other hand, Turkish buyers are unlikely to agree to price levels of $370-376/mt CFR Turkey for HMS I/II 80:20 scrap, for July deliveries. Scrap arriving in scrap yards is expected to increase gradually with the warmer weather. Additionally, market sources state that US suppliers may come under pressure to lower their prices in the coming days due to their unsatisfactory scrap sales volumes for June deliveries. The decrease in iron ore prices below the psychological threshold of $100/mt for the first time in a long time has increased the pressure on scrap prices as well as on prices of semi-finished and finished steel products. Given current circumstances, HMS I/II 80:20 scrap prices which are currently in the range of $373-376/mt CFR Turkey are likely to be revised downward in the coming days.