It is reported that, in the mid June 2010, world scrap market has reached the bottom. Cost of European material HMS 1&2 for Turkish shipments dropped to USD 285 to USD 295 per tonne CFR, and quotations for Russian A3 reduced to USD 280 to USD 290 per tonne CFR. At Far East American HMS1 shipped in containers cheapened to around USD 320 per tonne CFR. However prices were at these marks only several days. Growth of buyers activity allowed the sellers to get back their lost positions.
By data from various sources during recent two weeks Turkish companies have purchased mainly from Europe and US around 600,000 to 800,000 tonnes of scrap. Before that they were out of the market for two month and naturally used majority of their stocks while that time. Despite excess of scrap in Europe appeared in consequence of dramatic drop in loading capacities of mini mills in the region, traders used a favorable opportunity to rise prices by USD 15 to USD 20 per tonne. In the end of June American HMS 1&2 (80:20) is quoted in Turkey averagely at USD 315 per tonne CFR.
In East Asia, stop of the fall in scrap market was connected first of all with China. Local companies mostly did not purchased scrap overseas since February because of very high prices for imported material. However, cheapening of US HMS 1 to USD 340 to USD 350 per tonne CFR and Japanese H2 to USD 330 to USD to 340 per tonne CFR made such deals profitable even with 18% duty and 10% VAT. Moreover, scrap market passed the lowest drop point in Japan also, where some signs of stabilization appeared recent days after two months decline. However in other countries of the region demand for scrap remains quite weak so there is no such revival as in Turkey there.
Price rise for scrap was used by Turkish rebar exporters as an occasion to increase prices for their product to USD 520 to USD 530 per tonne FOB in comparison with USD 500 to USD 510 per tonne FOB in mid June 2010. The same way did suppliers of reinforced bars and billets from CIS who returned their quotations to USD 500 to USD 510 and USD 430 to USD 460 per tonne FOB respectively.
However its hardly possible to figure on stable growth of prices for steel scrap. Obviously prices are going up exclusively because of Turkish purchases which are to cease in early July already. Neither in Europe nor in US steel scrap is not quite in demand and improvement is expected there not earlier than in autumn.
Finally in China long steel products market is in recession which prevents any upwards movement of local scrap prices. Should regional quotations to climb even for a little, Chinese to stop their overseas purchases again? Probably prices for scrap after a little rise in the end of June start of July to continue their slow decrease which to last at least till autumn. Simultaneously this rise could play as a stabilizing factor in Middle East market of long steel products.