In Turkiye, scrap prices increased by 0.8% last week, in China they fell by 1%, and in the USA they remained at the level of the previous week

The global scrap market remains volatile due to fluctuating steel demand. In Turkiye scrap increased slightly amid higher freight rates and increased purchases by steelmakers. In the USA, with the beginning of September trading, a drop in quotations is expected. In the Chinese market, prices are falling under the influence of increased supply.

Scrap prices in Turkiye for the week of September 4-11, 2023, slightly increased compared to the previous week – by 0.8%,  up to $375-379/t CFR.

Scrap quotations in the Turkish market rose last week amid renewed purchases by steel mills, as well as a sharp increase in freight rates, which triggered an unexpected increase in contracts in the presence of sufficient supply.

Turkish steelmakers bought raw materials from American, Baltic and European suppliers.

Most market participants expected Turkiye to stay away from raw material purchases for at least another week due to negative conditions in the steel market, but strong Indian demand for both containerized and bulk scrap, as well as higher freight rates, prompted a recovery in scrap demand among Turkish mills.

Amid strong demand in India, high freight costs and missed scrap purchase plans for October by Turkish steelmakers, market participants expect scrap prices to rise in the near term despite weak steel demand and low margins for domestic steelmakers.

In USA as of September 8, scrap prices were at the level of $351-354/t, which corresponds to the indicator of September 1. At the same time, the forecast price for September 15 is $347-350/t FOB.

With the start of trading on the US market, scrap prices began to decline. Planned shutdowns of some local factories in September and October have a negative impact on collection and price formation. On the other hand, the supply of low-quality raw materials is limited, and export demand continues to persist, which may support prices in the short term. However, for premium grades, supply is outpacing demand, putting pressure on prices. The market is expected to stabilize by the end of the current week.

Chinese scrap market for the week of September 4-11 declined by 1% compared to the previous week – to $388.62/t CFR. The reason for the decrease in prices was the oversupply of raw materials on the market. At the same time, the work of steelmakers did not slow down, and the shipment of raw materials to plants increased by 17%.

“Supply is growing faster than demand from steel mills, which has put pressure on prices. Despite the recovery of prices on the steel market thanks to the policy of stimulating the economy, the demand for finished products remained stable, which also had a negative impact on scrap quotations,» analysts note.

As GMK Center reported earlier, Ukraine in January-June 2023 increased the export of scrap by 3.2 times per year – up to 92,000 tons. Scrap production decreased by 25.2% y/y – to 531,000 tons. Scrap supplies to Ukrainian steel plants decreased by 37.2% y/y – to 413.8 thousand tons.