Steel scrap prices rally in first sign of revival after the crash

WASHINGTON (Scrap Monster): Week gone by has sent the first signal of an imminent revival in long market. Scrap market shrugged of the tag of favorite whipping boy by gaining USD 10-15 per tonne in recent deals.

In rare move transactions were concluded by Turkish mills with CIS suppliers at levels USD 345-350 per tonne CFR, USD 10-15 per tonne above last week's level. Subsequently contracts have been signed at USD 350-355 per tonne CFR also.

Scrap levels had declined by a whopping USD 35-40 per tonne during February on poor off take from Turkish mills since steel production had suffered owing to collapsing Lira and credit squeeze. In the meanwhile US and European traders left the market finding price levels to be unworkable.

However long absence and concurrent stability of Lira has encouraged mills to venture for replenishing depleted stock and enhance production. Turkish buyers had been bidding time for market to bottom out before commencing buying as tactical move.

On a comeback trail CIS traders have been the first to conclude deals taking advantage of proximity and absence of US and European suppliers.
In early March, CIS-based scrap exporters have concluded some contracts with Turkish consumers, who have accepted the increase after a significant drop in supply. Transaction prices have risen by a mere $8-14/t as compared to last week’s nominal level.

UAE market has been quick to react with a major rebar producer Emirates steel opting for rollover from Feb to March in rebar price when market was agog of an anticipated correction owing to poor demand. It is expected that coming fortnight will see rally in scrap levels followed by consequent rally in finished price in Middle East.

Courtesy: www.steelguru.com