A revival of activity in the Turkish import scrap market in late October has stirred up slightly Russian and Ukrainian exporters, who had to sell the material to local plants or even take a break over the past seven weeks. It seems like US exporters have succeeded in reversing the downward price trend and the quotations for import scrap will be going up in Turkey in the short term.
However, only Russian exporters of the Azov-Black Sea basin can actually start sales so far in spite of rising prices and growing number of deals.
In particular, the exporters of Rostov-on-Don have mixed their expensive inventories with quite sufficient amount of less expensive material in the period of non-existent demand from foreign buyers; due to this, the lowest workable prices in Turkey are now by $20-25/t lower than a month ago.
Whereas last week very few exporters agreed to sell their material at $365/t C&F, more and more suppliers are willing to close sales now while the bid prices are at $370-375/t C&F ($350-355/t FOB).
At these prices in foreign markets, selling of A3 scrap, which the exporters of Rostov-on-Don are still buying at $262-270/t CPT, becomes profitable. The suppliers can raise the buying prices in rouble terms, due to its devaluation, by $3-5/t.
Ukrainian exporters are less successful these days as they need the prices to rise by another $10-15/t to resume exports. Though some scrap collectors need to offload the port stocks and are ready to close sales at $375/t C&F ($355/t FOB), most suppliers are interested in the sales at no less than $380-385/t C&F ($360-365/t FOB). Currently, Turkish traders bid at about $367-370/t C&F Marmara Sea ports for the Ukrainian material.
Ukrainian exporters are still buying A3 scrap at $250-255/t CPT in ports, but considering the difference between these prices and those from mills, they have to move the prices by at least $40-45/t higher to secure steady scrap inflow.
The exporters from north-western Russia are also starting negotiations, they still need the prices to be at $340-350/t FOB ($390/t C&F Turkey or $400/t C&F India), like last week. In particular, Indian buyers are already ready to pay the price for the material from the USA, and in case the prices continue to steadily grow, scrap collectors from St. Petersburg will be able to resume export shipments in early November.
However, most suppliers are wary of further developments. In spite of optimistic frecasts in the short term, the future of scrap prices will depend on the situation in Turkish steel product segments, where there are much less reason for an increase. Early November is still expected to be successful for CIS scrap suppliers, though. And the prices for Russian and Ukrainian scrap may add another $10-20/t provided the upward trend persists during this period.
(Source: www.metalexpert-group.com)