Scrap metal prices fell by a third

Recent trends in shipments of ferrous scrap from Europe to Turkey show a sharp drop in prices during 2016 compared to the previous year. The price of HMS I /II mix 80/20 scrap at Turkish refineries has reportedly dropped well below $ 200 /t CFR. It should be noted that Turkish factories were willing to pay over $ 300 per ton CFR for the same material a year earlier. This suggests that scrap purchase prices have dropped by more than one third from early 2015 to early 2016.

According to the metallurgical industry participants, the scrap metal market has been rather restrained since the beginning of the year. The supply of standard quality HMS I /II 80/20 scrap from Europe to Turkish factories was estimated at USD 180-185 per tonne CFR at the beginning of this year. Cut scrap prices have averaged around $ 185-190 per tonne CFR since January this year.

The significant jump in finished steel exports from China continues to impact global steel and scrap markets. According to the latest data released by the Chinese customs administration, the country exported 10.66 million tons of finished rolled products in December last year. This is the highest level of finished steel exports recorded in the country so far. Exports throughout 2015 jumped more than 20 percent from 93.78 million tons in 2014 to 112.4 million tons in 2015. At the same time, Chinese steel production declined slightly from 822.7 million tonnes in 2014 to 803.83 million tonnes in 2015. Also, the global capacity utilization rate for steel production fell sharply during the year.

Meanwhile, Turkish import prices for HMS scrap remain in the $ 185-186 /t CFR range from the US.