While the Turkish scrap market was still in the midst of digesting new prices above the $400/t threshold, fresh bookings at even higher prices surprised many market players.

Scrap prices already had recorded a sharp rise on Thursday in a deal concluded at $404/t for HMS 1&2 80:20 and $424/t cfr for shredded from the US. The previous deal by the same supplier and buyer had concluded at $393/t cfr for HMS 1&2 90:10 ten days earlier.

On Friday, prices continued to jump on fresh bookings. A southern mill bought UK-origin HMS 1&2 80:20 at $405/t and bonus grade at $425/t cfr. A northern mill bought a US-origin cargo comprising HMS 1&2 80:20 at $415/t cfr and bonus and shredded at $435/t cfr. A western mill bought EU-origin HMS 1&2 80:20 at $407.25/t cfr.

Numerous factors support the increases in scrap prices: higher freight and dock rates, a strengthening euro per dollar and expected domestic price rises in the US and the EU. However, most market participants question if such a sharp rise is reasonable. Some even say ballooning scrap prices are likely to burst soon.

A trader tells Kallanish: ”This is really insane. We broke $400/t threshold only yesterday and saw $415/t today. OK, we have seen an improvement in domestic rebar demand today but sustainability of it is a big question amid ongoing financial issues. It would be more understandable if a flat steel mill paid these values."

Another trader says: ”Producing from billet is more competitive now as there are billet offers at $520-525/t cfr from Russia on Friday. I think scrap prices will settle down soon after urgent needs are fulfilled.”

A mill reports that it believes scrap prices have peaked at $415/t cfr and further rises are not likely.

Billet offers are seen varying between $517-555/t cfr depending on origin and destination port. However, despite high scrap prices and competitive billet offers, demand for Russian billets, which were on the low side of the range, was not strong on Friday.

In the short-sea market, Romanian suppliers are seen intending to sell at $385/t cfr. Adriatic-origin HMS 1&2 80:20, which was sold at $379/t cfr a week earlier, is at $387/t cfr Aliaga as of Thursday.

In Turkey's domestic scrap market, three western mills increased their shipbreaking scrap buying prices to $380-383/t on Friday.

In the rebar market, demand appeared to significantly improve on Friday compared with a day earlier. Some Turkish mills increased their prices following the US deal at $404/t, as expected, while most mills in southern Turkey kept their sales closed. A western mill closed sales after selling some quantity at $585/t, whilst almost all producers offering at $590-605/t closed sales in the afternoon. Market players say they expect prices to rise by another $10/t in some regions on Monday.