World scrap prices increased by $10/t on the background of demand recovery

Scrap quotations in Turkiye for the week of January 23-30, 2023, increased to $420/t

Prices for HMS 1/2 scrap on the Turkish market during January 23-30, 2023, increased by $10/t compared to the previous week – up to $418-420/t. Thus, quotations of scrap metal began to recover after a two-week fall. Kallanish price indicator reports about it.

Turkish steelmakers agreed to new price levels, although a week ago they insisted on prices below $400/t. The patience of scrap exporters made it possible to overcome the resistance of Turkish consumers.

The market did not anticipate that demand would recover at this price level. The first contracts were concluded with sellers from the USA. Seeing this trend, other suppliers also increased their quotations.

With the market supply significantly reduced, Turkish steelmakers began buying raw materials to avoid shortages and further price increases. In addition, the increase in demand was influenced by the decrease in gas prices for the country’s industry from February 1, 2023. Increasing the margin of steelmakers due to lower costs of energy resources makes it possible to purchase raw materials at market prices without significant losses.

Due to the sharp increase in demand and low supply, suppliers are aiming to raise prices. Steelmakers, in turn, are not sure that the funds saved on energy resources will be enough to cover the next increase in the cost of scrap metal.

A slight increase in scrap prices in Turkiye is expected in the near future, which will be a consequence of the limited supply in the market. Demand may also suffer, as Turkish steelmakers need time to assess the positive impact of lower energy costs.

As GMK Center reported earlier,  world consumption of scrap in the first half of 2022 decreased by 8.4% compared to the same period in 2021 – to 248.79 million tons. The negative trend in demand for scrap was supported by the decline in global steel production.

The world consumption of scrap metal in steel production in 2021 increased to 620 million tons. Over the year, the share of scrap in steel producing increased to 32%, while in 2019 it was 30%, and in 2020, at the height of the pandemic – 29%.