Page 40 from: September 2007

exporters in the USA and the EU for
rising deep-sea freight rates. They
bought some 20 cargoes in mid-Au-
gust for prompt and September de-
livery at prices of, initially, US$ 325-
330 per tonne cfr for the 80/20 HMS
I/II mix; however, mills had to raise
their prices to around US$ 340 per
tonne when the scrap trade respond-
ed to ever-rising freight rates by no
longer accepting offers at early-Au-
gust levels.

At first, the Turks pointed to the
availability of relatively cheap but
good-quality A-3 scrap from Russia’s
Baltic and Black Sea ports and from
the Ukraine at prices of US$ 325
and US$ 330 per tonne cfr Turkey.
But EU exporters responded by ex-
plaining that Russia and the
Ukraine often shipped their scrap in
old ships operating under a domestic
flag and enjoyed much lower freight
rates of around US$ 20 per tonne for
shipments to Turkish ports. Fur-
thermore, it was noted, much less
scrap was available from Baltic and
Black Sea ports than in previous
years as Russia and the Ukraine
need nearly all of the available do-
mestic scrap to feed their estab-
lished and recently-built electric arc

M A R K E T A N A L Y S I S

Ferrous

Higher prices – but freight
rates spoil the party
Turkey was forced to increase its delivered scrap prices by

some US$ 10 to 20 per tonne in August because exporters,

who had seen shipping freight rates rise to levels which are

more than 70% higher than at the start of the year, simply

refused to sell at the prices on offer. The US Composite and

automobile factory bundle price edged higher and Japan

also witnessed an upward price trend; however, prices in

Europe have fal len over the past month. Latest fob

Rotterdam prices include: US$ 290 per tonne for 80/20

HMS I/II scrap; US$ 295 for shredded; and US$ 275-280 for

the 60/40 I/II mix

Closed: September 1 2007

By Alfred Nijkerk

Turkey increased its cfr prices for
scrap in mid-August as overseas
sellers were no longer willing to ship
at July levels given that deep-sea
freight rates had reached record
highs and that non-US exporters
were still battling against the weak-
ness of the US dollar. The US Com-
posite price gained a few dollars to
reach US$ 253.50 per gross ton in
mid-August – an increase influenced
by the US$ 10 improvement in the
US automobile factory bundles price
to US$ 290 per tonne.

Deep-sea shipping freight rates
jumped to more than US$ 50 per
tonne for scrap shipments to Turkey
from Rotterdam and other EU sea-
ports, and to over US$ 70 per tonne
for shipments from the US East
Coast to the same destination. With
the grain season approaching, there
is an apparent shortage of all types
of sea-going ships, but especially the
Handymax-size vessels of typically
30 000-60 000 tonnes deadweight
which are frequently used by scrap
exporters. At the time of writing,
there are fears that shipping rates
may rise even higher in September.

In the first instance, Turkish
mills refused to compensate scrap

Recycling International • September 2007 40

RI_019 MA Ferrous:MA Ferrous 05-09-2007 16:15 Pagina 40