Last week global scrap and iron ore prices continued their recovery, supporting the overall positive trend for finished steel prices. Scrap levels in Turkey are rapidly approaching the annual peak registered at the beginning of March this year, while iron ore remains almost $30/t below the record level of February and March, but well above the bottom level of $55/t CFR Qingdao in mid-June.

Comparing the price of scrap and iron ore, it is interesting to note that the differential between the scrap Turkish benchmark and the iron ore Chinese import price has reached its highest level since May 2016. Currently the differential is close to $235/t, indicating that currently iron ore based producers have an advantage over EAF-based mills, hence a realignment of the two prices could happen in the next few weeks.