Turkish scrap prices weaken further

Turkish scrap prices continued to edge lower, down to $352 /t CFR HMS 1/2 80:20 (-$13 /t w/w, -$54 /t m/m) based on the latest deal from the US.

Scrap prices(1) $/t08-Jul15-Jul22-Jul29-Jul05-Aug
HMS 1/2 80:20 CFR Turkey406406406365352
Shredded CFR Turkey426426426385372
Notes: (1) weighted average of known transactions from all points of origin.

The activity in Turkish finished steel and scrap markets remained slow last week. Finished longs export prices fell by a further $35–40 w/w. The differential to the lowest level since March. Lower margins and compounding lower production during summer maintenance period continued to depress scrap demand and prices. This is despite seasonally slower collection in the exporting regions.

Asian scrap offers stabilised at $350 /t CFR Vietnam, which decreased slightly from the range of $350–360 /t in the prior week. . Nevertheless, scrap buying has muted again after some deals done in the week before last week because of weak steel market fundamentals.

Outlook: Activity in Turkish scrap market to pick up in August

We expect to see finished steel buyers return to the market around early September for conventional post-summer restocking. The volumes restocked would depend on buyers’ expectations of a price floor. This will lead to a slight rebound in prices on restocking demand for scrap before reverting to a slower but steady decline through the rest of the year.

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