Scrap prices have been doused by sudden blackout by Turkish buyers.
It is learnt that offers at USD 400 per tonne are being spurned by buyers who are countering at USD 380 per tonne CFR terms and less. It is official that billets and scrap prices have succumbed by USD 30 per tonne and USD 40 per tonne respectively at Black Sea in a day.
At Constanta port scrap prices have reached a bottom of USD 300 per tonne to USD 340 per tonne from USD 400 per tonne to USD 420 per tonne, one week ago.
In Bulgaria and in all Balkan area scrap prices have lost substantial ground, falling from a level of EUR 300 per tonne of one week ago to today EUR 220 per tonne to EUR 230 per tonne.
This sudden death situation has arisen by the decision of the main Turkish Mills to stop buying. It is an effective tool deployed in the past by Turkish mills to attain specific targets to cool down scrap prices and procure cheaper on arrival and reap the maximum returns assuming finished products just able to maintain the momentum meanwhile.
However it doesn't look as a generalized and anticipated move towards a price crashing like in July 2008. Most probably it's a specific fact, limited to a specific region (Black Sea) and linked to a speculative move of the Turkish steel mills, looking to cool down scrap prices. When they will come back buying, they'll be able to secure quantities at much lower prices and thus enjoying much wider spreads as, in the meantime, finished products should probably have kept price levels proportionally higher.