Steel scrap prices move down as Turkish buying cools

Scrap steel prices have fallen from a high of USD 520 per tonne to USD 440 per tonne. The market now presents some anxious moments to buyers as they fear a repeat of 2008 may occur with prices reaching a peak point and thereafter crashing.

Many analysts believe that the prices may hit a saturation point. UBS, premier global financial services firm has forecast weak prices ahead for scrap metals. The major reason behind the price spikes in last the years is said to be the unaltered demand from Turkey which continues to be the leading importer of scrap metals from USA.

For the last 4 years from 2007, Turkey has been the largest buyer of scrap steel from United States. According to US commerce department and US census bureau, Turkey led the buying from 2007 to 2010 by accounting 19.8%, 20.8%, 16.1% and 18.6% respectively. Only in 2009, China surpassed Turkey accounting for 28% of US imports, while Turkey fared lower at 16.1 %.

Mr John Ambrosia has said that it seemed like every time the market needed a bump, there was Turkey coming in and placing orders. And each time we took a hit on scrap prices, it was because Turkey was out. Throughout 2010, Turkish steelmakers made huge buy in the market averaging somewhere around 300,000 tonnes each month helping to create a seller’s market for most of last year.

Bucking the general trend, scrap prices in Russia have been soaring, up by 10% since last December on severe supply crunch followed by adverse weather conditions in the country. At present, Russia’s A3 scrap prices have increased to USD 360 per tonne to USD 400 per tonne up by USD 40 since last December.

Russian scrap export prices are likely to move upward in lines with iron ore prices. The price may increase further in March when more Turkish buyers return to the market.

(Sourced from Scrap Metals Bulletin)