Turkish mills have been absent from the scrap market for an extended 2 months and it is expected that they will resume replenishment as stocks run low thus reversing the down cycle once again.
The debacle which commenced in mid April with a surprise is likely to be gradual as it had a disproportionately devastating impact with a climb down of almost USD 200 per tonne leaving everybody aghast. Current prices at USD 290 per tonne to USD 300 per tonne CFR seems to have hit the floor.
Global traders tell that the offer prices of HMS 1&2 80:20 are now at USD 295 per tonne to USD 300 per tonne CFR from the EU and USD 305 per tonne to USD 310 per tonne from the USA, which is almost USD 40 per tonne lower than the beginning of last week.
HMS 1&2 70:30 is being offered at USD 285 per tonne CFR from EU while shredded scrap is being offered at USD 315 per tonne CFR from USA. Prices for scrap from the CIS region also fell sharply in line with the global prices. A3 grade scrap is being offered to Turkey at USD 280 per tonne to USD 285 per tonne CFR, down from around USD 310 per tonne to USD 320 per tonne CFR at the beginning of last week.
This might just prove to be the penultimate week before the correction starts as is evident from the recent encouraging signals emerging from isolated though vantage locations. The scrap prices in Italy improved by about USD 25 per tonne to USD 30 per tonne.
Moreover mills have been rampantly cutting down on production leading to curtailed scrap availability and collection leading to shortage might just provide the necessary thrust.