Turkish scrap prices jump on tightening market

Turkish scrap import prices increased w/w

Last week, Turkish scrap prices rose sharply on three new deals from western Europe and North America, lifting our assessment for HMS 1/2 80:20 to $392 /t CFR (+$40 /t w/w, -$14 /t m/m).

Scrap prices(1) $/t15-Jul22-Jul29-Jul05-Aug12-Aug
HMS 1/2 80:20 CFR Turkey406406365352392
Shredded CFR Turkey426426385372412
Notes: (1) weighted average of known transactions from all points of origin.

The main driver of this sudden increase is scrap supply disruptions in Europe. In addition to seasonally lower collection, there has been some barriers in river logistics for scrap. While Turkish longs demand has stayed relatively slow despite an upturn in domestic activity, mills have been more actively purchasing scrap amid concerns over how long this supply disruption may last.

Following the development in Turkey, Asian scrap sellers have also lifted their offers for H2 to $370–380 /t CFR Vietnam, up from $350 /t in the prior week. Nevertheless, buying interest remains low.

Outlook: Turkish scrap prices may continue rise

Supply disruptions are unlikely to ease in the near term, which will continue providing price support. Meanwhile, finished steel demand will recover in the coming weeks following more restocking activity. This will support scrap demand and therefore lift prices further.

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