Ferrous scrap prices have crashed over the past five weeks, finally coming more in line with weakened steel prices, which have fallen by a larger magnitude since the middle of 2018.
Using CFR Turkey scrap as a gauge, spot prices of HMS I/II 80:20 have fallen $136.5/mt from their peak in March 2018 as of September 12. Over the same period, rebar prices on an FOB Turkey basis have fallen by a larger $172.5/mt, S&P Global Platts data show.
While in percentage terms, prices of scrap have fallen 36%, compared with 29% for rebar, market participants typically view scrap and steel prices in absolute rather than relative terms, as the yield ratio of steel per ton of scrap is nearly one-to-one.
But in comparison with steel billet prices on an FOB Black Sea basis, which saw prices fall $186/mt (or