Posted on 23 Aug 2018
European scrap prices have started to fall on the back of the Turkish slump registered during August, Kallanish learns from market sources.
Turkish scrap prices started moving down at the end of July, only to accelerate the fall dramatically in mid-August after the depreciation of the lira. As a consequence, the price for HMS 1/2 80:20 has lost some $40/tonne since the end of July to $300/t cfr Turkey.
The impact on some of the larger European markets such as Italy and Germany is yet to be registered as the countries are set to discuss the new contracts for September in the coming days. Nevertheless, the first dips in price in the European scrap spot market have been confirmed in Spain and Sweden, for example.
In Sweden the local association JBF in its monthly index for the domestic scrap market issued a note specifying that the correction in prices has accelerated from 15 August. Domestic prices lost SEK 50/t ($5.5/t) during the first part of August, only to fall a further SEK 250/t from 15 August onwards.
In Spain, similarly, the market lost €10/t last week and is preparing for a further correction of another €10/t in the coming days (see Kallanish 22 August).
Most sources contacted confirmed that the impact will be very significant for September scrap contracts in Europe. They note nevertheless that next week there will be more clarity over the exact size of the fall when the Turkish market returns from holiday at the end of the week.
