AMSTERDAM: A resurgence in prices made 2017 a strong year for global scrap exporters after a challenging 2015 and 2016. But a strengthening of the euro over the year cut into the gains made by European suppliers on dollar-denominated cfr Turkey sales compared with suppliers from other destinations. An increase in steel demand and prices in 2017 boosted Turkish steelmakers’ appetite for ferrous scrap, resulting in a rise in scrap consumption. This contributed to a 31.1pc rise in the monthly average of the Argus daily HMS 1/2 80:20 cfr Turkey steel scrap price assessment to $355.30/t in December compared with $270.96/t in January. The euro appreciated by more than 10pc against the US dollar in 2017 to €0.845/$1 in December from €0.941/$1 in January, supported by an economic recovery across the Eurozone. This meant that when converted to euros, the average monthly cfr Turkey HMS 1/2 80:20 price in December was €300.22/t, an increase of 17.7pc from €254.91/t in January but 13 percentage points lower than the dollar-denominated price.That did not dent European suppliers’ appetite to supply Turkey, as Turkish scrap imports from European countries that use the euro increased by 22.4pc on the year to 7.1mn t in January-November.Total Turkish imports of steel scrap totalled 18.9mn t in January-November 2017, up by 17.9pc on the year, Tuik data show.Dockside prices in the Netherlands, one of the major continental European export hubs for bulk steel scrap cargoes to Turkey, moved more or less in line with the euro denominated cfr Turkey price.Delivered to dock prices for HMS 1/2 75:25 in the Netherlands averaged around €249/t in December, up by 20pc compared with a January average of around €208/t.But increases in European domestic delivered to mill scrap prices lagged the Turkish imported ferrous scrap price in 2017, as Europe experienced a slower rate of increase in steel output compared with Turkey.The monthly average of the Argus weekly assessed northern Europe delivered to mill shredded ferrous scrap price rose by 8.4pc to €271.18/t in December from €250.13/t in January. The monthly average of the southern Europe delivered to mill shredded ferrous scrap price moved up by 10.4pc to €288.42/t in December from €261.25/t in January.Turkey’s crude steel output in January-November 2017 rose by 12.7pc on the year to 34.2mn t, while output from European Union nations increased by 3.8pc on the year to 154.9mn t, according to World Steel Association data.Turkish domestic steel demand, particularly from the construction sector, increased significantly following the constitutional referendum on 16 April, after which many infrastructure and housing projects resumed. January-March Turkish building permits fell by 15pc on the year to 28,700, according to Turkish statistics agency Tuik, as many projects were put on hold prior to the referendum because of political and economic uncertainty, before recovering in April-September. Construction permits in January-September totalled 125,800, up by 32pc on the year.
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