The global scrap market showed a decline in prices in most key regions during November 1-25, 2024. In Turkey, supply fell to its lowest level in 2 years, while in the US it fell by 3.6%. The European market was characterized by multidirectional trends, where stagnation prevailed in general. In China, quotes fell by 2.7%. A partial recovery is expected only in January 2025.
November 2024 was a period of falling scrap prices in Turkey. Prices for HMS 1&2 80:20 raw materials decreased by 5% – to $344-345/t CFR for the period of November 1-25, which is the lowest level in the last two years. Prices continued the decline that began in October (-1.4%), driven by several key factors, including oversupply and weak demand for steel.
At the beginning of the month, the market remained weak due to ample supply of scrap, particularly from the EU and the UK, which met the needs of Turkish steel mills. Although suppliers tried to raise prices amid rising freight costs and expectations of Chinese economic stimulus, Turkish mills resisted any attempts to increase prices. Deals were concluded at $355-360/mt CFR, but at the end of the first week, offers began to fall to $350-355/mt CFR.
Expectations of Chinese incentives played a significant role in shaping market sentiment. However, after a limited package of measures was announced on November 8, suppliers’ optimism declined significantly. Turkish rebar prices continued to decline, falling from $610-625/t to $595-615/t ex-works by mid-month.
The rate of decline in scrap prices accelerated in the second half of November. Deals for the purchase of HMS 1&2 80:20 from the EU were fixed at $344-345/t CFR, while those from Romania were $325/t CFR. Until November 20, deals were concluded at $340/mt CFR from the UK, the lowest level since 2022.
The main reasons for the decline were oversupply: European suppliers, in particular from Benelux, continued to put pressure on the market with many cargoes; weak demand: Turkish mills postponed purchases due to problems with steel sales in the domestic and export markets; currency fluctuations: the weakening of the euro against the dollar allowed suppliers to offer scrap at a lower price.
Despite the significant drop, market participants expect prices to recover in January when European demand returns. However, the market will remain under pressure until the end of 2024. Steel mills that have cut production have met the minimum demand for December, and weak demand for steel does not provide prerequisites for a significant increase in scrap prices in the short term.