Scrap prices begin to fall amid Turkish downturn

Prices for European scrap metal began to fall amid a downturn in the Turkish market recorded in August.

Scrap prices in Turkey began to decline in late July, accelerating sharply in mid-August following the depreciation of the lira. As a consequence, the price of HMS 1/2 80:20 lost about $ 40 /t from the end of July to $ 300 /t.

The impact on some of the larger European markets such as Italy and Germany has yet to be recorded as the countries intend to negotiate new contracts for September in the coming days. However, the first price drops in the European scrap market were confirmed in Spain and Sweden.

In Sweden, local association JBF issued a note in its monthly index for the domestic scrap market indicating that the price correction has accelerated since 15 August. Domestic prices lost SEK 50 /t (USD 5.5 per tonne) in the first half of August, and on August 15 of this year alone they fell by another SEK 250,000.

In Spain, similarly, the market lost € 10 /t last week and is preparing to further correct another 10 € /t in the coming days.

Most of the sources confirmed that the impact will be very significant for the September contracts for scrap in Europe. However, they note that there will be more clarity next week on the exact size of the fall when the Turkish market returns from its weekend vacation.