Turkey imported scrap: Prices increase to a six-month high level

Turkey's imported scrap prices have continued to move up for the last one month or so. Buyers and steelmakers have remained active in the market, barring few days of Eid-holidays. Recently concluded deal of deep-sea bulk cargo from UK and Baltic region has witnessed prices reaching a six-months high level. Some of the major reasons behind this are as enumerated below.

Limited availability of USA origin scrap - This now stands at $285/t CFR Turkey, having risen by $4/t since the last report. As per our information, USA based suppliers are now attempting to set offers at above $290/t CFR level, primarily due to following:-

• Low availability with the yards as a result of pandemic induced shutdowns.
  
  
• Limited scrap offers being reported in the market. The market participants reporting to SteelMint have confirmed this.
  
  

Recent scrap import trades of Turkey

Surge in Chinese spot iron ore fines - Another reason behind the hike in scrap prices could be possibly due to the recent surge in spot iron ore fines price in China which has hit a one-year high, the Fe 62% fines index having reached $118.4/t CFR China on 05 Aug'20. Iron ore prices have increased sharply on the back of a surge in Chinese iron ore & steel futures along with positive demand outlook for steel, post the rainy season.

Apart from the above, Turkey's steel industry has witnessed an increase in exports. Their steel exports have increased on a monthly basis. The country has exported 0.8 mn t of finished flat (up by 35% m-o-m) and 0.82 mn t of finished long (up by 52% m-o-m) in Jun '20. Following hike in scrap prices and increase in global steel prices, Turkish steel prices have also moved up.

Outlook - The increased price levels are likely to be supported in near short term till scrap tightness from US eases out.