Prices for HMS 1/2 scrap climbed by $8/t or 1.9% from the previous week on the Turkish market between January 30 and February 6, 2023, reaching $425 to $428/t. As a result, scrap prices are rising for the second week in a row. The price indicator for Kallan reports on it.
Surging prices due to limited supply
Turkey scrap prices are rising as demand outweighs supply. Suppliers from the Baltic States, the United States, Canada, and the European Union provide raw materials to local steel producers.
Because there is a limited supply, Turkish plants are forced to accept pricing offers from suppliers. The goal of scrap collectors is a potential increase in prices.
EU suppliers made the decision to refrain from selling scrap metal to Turkey at prices below $425/t after analyzing market prospects and low scrap collection rates. As they wait for the US auctions in February, US suppliers are taking their time to sell to Turkish steelmakers. After that, it is anticipated that American scrap prices will rise by an average of $30/t.
Turkish steelmakers claim that when raw material costs reach $430/t or higher, suppliers will start to enter the market. The offer has now been artificially restricted.
Recent market situation in Turkey
The Turkey market has been stable recently, supporting scrap prices, but last week’s increase in local rebar demand had a beneficial effect. Although the demand for exports is still poor, domestic sales have picked up.
Given that Turkey was severely damaged by earthquakes on February 6, 2023, which resulted in fatalities and extensive loss of homes, infrastructure, etc, scrap prices are likely to stay stable in the near future.
Although it is difficult to accurately predict the incident’s effects on the nation’s steel industry given how recently it occurred, the steel and raw materials markets will experience a decline in activity as a result in the near future.
Long-term increases in scrap prices are expected in Turkey as a result of lower energy prices for the region’s businesses, which will allow them to use the money they would have otherwise spent on energy to buy raw materials.
A further boost in the demand for scrap will result from the potential for a sharp spike in domestic rebar demand brought on by the reconstruction of some cities’ damaged areas.
Global scrap market picture
Due to February trading, prices for scrap metal in the USA rose dramatically at the start of the month. The East Coast of the United States had an increase in scrap prices for the week of January 27 to February 3 of $15/t or 3.9%, bringing prices up to $403–409/t.
Rising export bids, challenging weather conditions, a persistently small supply, and rising steel prices all contributed to sustaining prices.
Due to a shortage of scrap, prices also rose sharply in China following the holidays. Scrap prices rose to $440–445/t for the week of January 27–February 3, an increase of $35/t or 8.5% over the previous week.
Due to the fact that the majority of market players are just starting to resume operations this week, the holiday break nonetheless had an impact on China’s scrap market. But, the majority of EAF plants will not begin operating until the second half of February, thus the actual demand for scrap has not yet surged. In general, Asia’s limited scrap supply is now supporting local prices.
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