Scrap prices in Mediterranean reached its highest level since April by the end of the first decade of December. Last week the prices with delivery to Turkey increased daily. It was reported about the sales of the US and European scrap HMS № 1&2 (80:20) as well as Russian and Romanian А3 по $420-425 per ton CFR. Some suppliers keep the products and wait for the offers at $440 per ton CFR or more. According to analysts scrap prices for Turkish buyers will increase to $450 per ton CFR and even more by the end of the year.
The situation in Mediterranean scrap suppliers in Dec. is advantageous for suppliers. First of all the demand for raw materials is at rather high level. Turkish and South European mills are making the stockpiles for Jan. Scrap supply volume is limited.
Sudden frosts and snowfalls in Europe and at Eastern cost of the USA resulted in scrap collection volumes decrease. Thus, shred scrap price in the USA in recent day s reached $420-430 per ton including delivery to a mill. In Europe scrap prices are determined now by long products manufacturers and integrated plants which can pay more than $400 per ton incl. delivery for Е3 (i.e. HMS № 1&2). That is why some European suppliers have switched to Italy and Spain offering more than $410 per ton FOB Rotterdam.
The Asian market is rather passive. Most regional consumers made their purchases before the beginning of scrap prices boom. In Dec. scrap in containers was demanded in Asia. The prices were $400-420 per ton CFR. The US suppliers of large-capacity scrap offered scrap at $430-440 per ton CFR. However, there were almost no deals. Chinese and Korean companies preferred to buy Japanese H2 material which was offered at $400-405 per ton CFR to China and at $415-430 per ton CFR to Korea.
According to analysts rather high buying activity from China can be expected in the end of the year. There is scrap shortage in the domestic market and the prices are constantly growing. That is why some mills are ready to buy imported scrap, although the prices are by $20-25 higher than domestic scrap (with VAT).
Obviously the current jump of scrap prices will not be long-term. Key consumers will refill the stockpiles and leave the market in the second half of Dec. and return in Jan. Only. However, the increase peak in the global market happens usually in early spring.