Last week, Turkish scrap import prices registered a clear increase as mills continued purchasing after a period of silence.

According to Kallanish price series, HMS 1&2 80:20 jumped back to $325/tonne cfr Turkey, from the $307/t cfr Turkey level touched at the very beginning of March.

Scrap merchants say a shortfall in supply is behind the price hike, as it was during the last uptick in January. “Demand in the EU and US markets makes it difficult to get a hold of scrap for the export market,” a Baltic-based supplier explains. He adds he is “… not so worried” about continued weak demand for Turkish long products as there are other factors driving scrap prices.

The recovery took the differential with iron ore levels back to a ‘normal’ level of some $240/t, after having fallen to less than $210/t in early January this year. Last year in early March the differential reached $310/t just as scrap reached a recent record level of $380/t cfr Turkey. In early March 2017, the differential stood at some $210-215/t.

Since the beginning of 2019, scrap has recovered some 14%, almost as much as iron ore, growing its value by little less than 18% since beginning of January this year.

The latest jump in scrap values, together with the slight reduction witnessed in iron ore prices, has realigned the two main raw material markets. This happens as the sector prepares to enter the second quarter amid strong sentiment in most major international markets. Nevertheless, many uncertainties continue to surround the future development of the Turkish market as well as the possible effects of a protracted weakness in European steel demand.