Winter is typically characterised by scrap taking centre stage in long product pricing. Lean period of scrap collection in the havens of US and Europe is pivotal in determining the cost and price for long product.
Long product price remained stable in October and November with scrap levels firming up. Scrap level zoomed in November by USD 40 per tonne thereby having incremental effect on finished as well. However the increase in finished prices was proportionate to the increase since demand was weak. It is noteworthy that Turkey is a key player in scrap buying. Scrap labels keep on swinging to the buying temperament of Turkish mills.
After consolidation in late November by USD 15 per tonne to USD 20 per tonne scrap levels have rebounded in the first half of December touching USD 405 per tonne to USD 410 per tonne CNF, Turkey. Partially supported by limited collection in wintry US and Europe and partly by rebound in finished level in Turkish domestic market has become stable.
Turkish mills have already uped the ante with offer levels of rebar and wire rod going up by USD 15 per tonne to USD 20 per tonne touching USD 600 per tonne to USD 610 per tonne and WRC at USD 620 per tonne to USD 625 per tonne FOB in Middle East.
European market is saddled in recession and the lull in construction activity during this period would slow down the demand and price. Slow scrap collection and the ensuing cost escalation cannot be offset by increase in finished levels.
