Turkey Scrap steadily recovers the gentle fall

Turkey Scrap market rebounded by USD 9/MT this week, currently procuring Scrap at USD 365/MT.

Tight credits and low production owing to sluggish demand in Turkey forced the importers to do hand to mouth purchase of Scrap. These muted buyers made the major sellers correct their prices to the levels of USD 345/MT CFR till last week.

As per industry sources, this week a Turkish steelmaker purchased a large cargo entirely consisting HMS 80:20 by a major merchant at USD 365/MT CFR Nemrut Bay, with the contract for complete April shipment.

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What was the driver for decline?

Sluggish demand in Turkey for Steel products made the mills to produce low and suffer tight credits which resulted to low imports of Scrap in Turkey. On the other hand, unexpected fall in Iron ore prices (also considered as the substitute to steel production) in the global market (particularly China), was reflected in Scrap offers too. These drivers forced the Turkey buyers to negotiate for lowest offers of Scrap and to drag down the offers to around USD 345/MT.

What was the reason for hike?

Turkish steel producers were expecting prices to collapse further to reach at around USD 340/MT CFR and maintain for a while in March. The speculation kept the steelmakers away from stocking at the level of USD 345-347/MT also. No steelmakers accumulated large stocks, hence the shortfall in material made them to accept higher prices what the seller are offering currently.

Scenario Ahead

Few participants believe that this hike was just a bubble which would not sustain for longer time, but the seller currently seems strict to their offers with not much of negotiations, understanding the tight supply and aggressive demand in market.

Current Scrap prices offered to India 

Offers in USD/MT CFR India