World scrap prices rose by $40 after three weeks of decline

Quotations of scrap metal in Turkey for the week of August 1-8 jumped to $385-390/t

HMS 1/2 scrap prices on the Turkish market for the week of August 1-8 increased by $40 compared to the previous week – up to $385-390/t. Thus, scrap quotations rose for the first time after a three-week decline, falling during this time to $347-350/t.

Kallanish price indicator informs about it.

Scrap prices in Turkey steadily increased all week. This trend was supported by problems with the scrap collection in Europe, which limited the supply of scrap. Offers from suppliers from the USA and the Baltics are also scarce.

Very low inflows of scrap metal into the EU, as well as problems with the delivery of goods due to low water levels in rivers, have limited export opportunities to Turkey. In addition, exporters decided to hold scrap to support market prices. Some European suppliers intend not to enter the market until mid-September and until the summer holidays are over.

As a result of limited supply, Turkish factories are forced to buy scrap metal at prices dictated by exporters. There is no European scrap – factories have nothing to choose from.

With rising prices, there is almost no demand from end users. Some mills are trying to use scrap quotes as a way to raise prices for rebars, but this can only work in the short term.

In addition to the low supply of scrap, the demand for finished steel is also weak, which reduces the margins of mills. Most of all, factories will resist price increases. Because of this, market participants expect a quick drop in quotations, as the market is falling everywhere except Turkey.

In the Chinese market, scrap prices rose significantly as steel mill profits recovered along with steel output. Last week, scrap metal quotations rose by 170 yuan,to 2,970 yuan/t ($440/t). The average daily consumption of scrap metal last week was 197,000 tons, rising by 14%. However, market volatility is still holding back scrap purchases.

As GMK Center reported earlier, scrap prices in Turkey for the week of July 25 – August 1 fell by $20 compared to the previous week – to $347-350/t. Scrap quotes fell for a third week in a row after rebounding from a 13-week low of $655/t level.