Last week the Turkish scrap price index reached a new three years low, falling to below $240/tonne cfr Turkey. The last time such a low level was registered was in October 2016, just as the market began to recover after a big drop in the previous two months. Now the situation is very uncertain and the low price level and the recovery in Chinese steel prices might indicate that the bottom of the cycle has been reached. Lower demand in the market for scrap however is not helping any sudden price recovery.

As Turkish prices suffer, US and European domestic indexes are also coming under strong pressure and are at the lowest levels seen so far in 2019. “We started the year with $310/t delivered in Mid-West, now prices are below $220/t. The price of the material in our stocks are much higher than customer’s bids. Our loss is increasing day by day,” a scrap trader in the US said this week.

EUROPE VOLUMES ALSO UNDER PRESSURE

Following the sharp falls recently seen in scrap prices, European collectors have begun to balk at the current levels of yards’ buying prices.

Scrap yards in Benelux, which had already decreased their purchasing prices for HMS I/II 80:20 to €185-190/t ($204-209/t) cfr last week, have lowered them by another €5-10/t this week. This due to price pressures coming mostly from their export customers. Some yards have indeed lowered their prices to €165-170/t cfr but are having difficulty in supplying scrap, as the collectors have not yet agreed this price level. For scrap collectors in Europe, today’s adoptable price for HMSI/II 80:20 appears to be standing at €175-180/t cfr.

“Following the sharp price drops, we have already seen significant decreases in the flow of scrap. When a yard in Amsterdam lowered its price to €165/t cfr last week, the flow has completely stopped. I am not sure if current price levels are sustainable,” a European-based scrap yard explains.