Will scrap prices fall?

Tuesday, 09 July 2019 22:22:41 (GMT+3)   |   Istanbul
       

After the scrap market indicated an uptrend towards the end of June, ex-US HMS I/II 80:20 scrap deal was concluded at $299/mt CFR Turkish ports last week. On Friday, July 5, SteelOrbis was informed that an ex-Baltic HMS I/II 80:20 scrap transaction was concluded at $298-299/mt CFR.

The weakness of global demand for billet and rebar has been contributing to the sluggishness of Turkish mills’ export sales in the current week. Facing significantly weak finished steel demand in their domestic market, Turkish mills have started to reject scrap offers as their export sales volumes have remained at low levels.

While supply is apparently not a problem in the global scrap market, European HMS I/II 80:20 scrap offers are heard to be in the range of $290-300/mt CFR Turkish ports, with ex-US HMS I/II 80:20 scrap offers at $305-310/mt CFR Turkish ports and ex-Baltic HMS I/II 80:20 scrap offers at $300-305/mt CFR Turkish ports. Additionally, SteelOrbis has been informed that suppliers in the Baltic region and the US are unwilling to reduce their offers below $300/mt CFR.

According to market sources, today, July 9, a Turkish steel mill has concluded an ex-Adriatic booking for 10,000 mt of HMS I/II 80:20 scrap at $284/mt CFR Turkish ports. Meanwhile, it is heard that Romanian scrap suppliers are unwilling to reduce their offers below $285/mt CFR Turkish ports. Also, Russian scrap suppliers are reportedly targeting $300/mt CFR Turkish ports and above for ex-Black Sea scrap, though they are not giving any offers for now.

On the other hand, an ex-Europe HMS I/II 80:20 scrap deal concluded yesterday, July 8, at $288/mt CFR Turkish ports has created expectations of a fall in the scrap market. However, market sources report that scrap suppliers are unwilling to change their offers on the basis of just one deal, as they want to insist on their current offers. Meanwhile, Turkish mills have adopted a cautious stance and have started to offer firm bids below $288/mt CFR Turkish ports, market sources report.


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