Despite the fact that the scrap dealers have no room for further price reductions, the supply continue unabated from various corners of the world. Supply has also improved with summer slowdowns in the European Union (EU) steel industry seeing more scrap available for export.

According to Steel Exporters' Forum, the mill sources informed that the market for finished steel products from Turkey has weakened, with rebars falling by $15-$20 per tonne in the last few weeks to around $200 FOB (Free on Board). While the scrap price has fallen only by $4 during the period, the market is expecting a further reduction proportionately.

The grade A3 from Russia, Ukraine and Romania have dropped below $80 per tonne c&f Istanbul. The Russian tax and Ukraine's threat of impositionof a ban on exports does not seem to have made any impact on the global prices as the supply has continued unhindered. Romania is reported to be exporting about 35,000-50,000 tonnes per month to Turkey. Contrary to all earlier expectations of further fall, the expected turn around has also cast a doubt over recovery in the global steel market.

The drop in FOB rates not withstanding, the c&f (cost and freight) prices of scrap in the far east have been constant or higher as the freight rates have shot up. Interestingly, the market in the far east has not shown any perceptible drop. China Steel reportedly had tendered for around 90,000 tonnes of heavy melting and other superior grades for August delivery.

As per available information the deal was struck at a price of around $107.50 per tonne of c&f for HMS 1 portion and around $115 per tonne of superior grades. The current negotiations are certainly to be at lower prices. In South Korea, the prices of basic grade HMS1 scrap are around $106-$107 per longtonne c&f, set by Posco in its latest tender. Even scrap prices in Japan has witnessed a surge against drop in prices elsewhere.

Tokyo Steel is reported to have been in the buyers market by yen 500 higher than a month ago.