With winter on the anvil scrap market paradoxically seems to be warming up. The apprehension of shortage engulfs the market transactions have picked up. Mills are making beeline to pile inventory to avoid dearer purchase setting spiral in motion.
Ironically the downstream demand continues to remain sullen. However the semis market has picked up recently providing cushion to the mills. The peak transactions levels have reached USD 390 per tonne C&F Turkish port during last week for shredded scrap with un-shredded going at USD 5 per tonne less.
Current offers of the US material are close to the peak transaction prices: HMS 1&2 80:20 USD 390 per tonne C&F, with shredded going at USD 395 per tonne C&F, the highest quality P&S material goes at USD 400 per tonne C&F.
EU exporters are closing deals at somewhat lower levels. One of the latest deals has been made on big quantity of HMS 1&2 70:30 at USD 375 per tonne C&F; however, by now prices of around USD 380 per tonne C&F prevail. A purchase of a mixed lot from a major EU supplier has been reported at USD 385 per tonne C&F and USD 390 per tonne C&F for HMS 1&2 80:20 and shredded scrap respectively in early November, up USD 5 per tonne WoW.
Russian exporters from the North Western district have joined the trading as well. Market sources say scrap collectors have been selling A3 material from St. Petersburg at USD 380 per tonne C&F for November shipment and up to USD 391 per tonne for December delivery.
Scrap prices offers from Black Sea have also picked up as market is expectant of active demand from Turkey to balance dearer buying from USA and Europe. The peak transaction levels have touched USD 385 per tonne C&F for A3 scrap, from USD 378 per tonne a week ago. Bulk of the buying is expected to be completed within November as the price band is wide leaving scope for negotiation.
The flurry will peter away soon as the downstream demand is unsupportive. The outlook for long products is gloomy. The domestic demand in havens of USA and EU remaining weak volumes will be diverted for exports keeping the supply adequate to regulate uncontrollable price hike till X-mas hiatus catches up.