Ferrous scrap prices have continued their post-safeguard erosion in the second week of July 2026. European-origin HMS 1/2 80:20 CFR Turkey has slipped to $363-373/mt, with a confirmed transaction at $373/mt for US-origin cargo and European Baltic cargoes at $363-365/mt. Trading Economics' scrap steel CFD stood at $393.50/mt on July 10, down 1.75% over the past month but still 14.22% higher year-on-year. The EU Steel Overcapacity Regulation (EU 2026/1384) entered into force July 1, cutting duty-free steel import quotas from ~33 Mt to ~18.3 Mt (a 47% reduction) with a 50% out-of-quota tariff. Turkiye's HRC quota of 160,574t was exhausted on day one, with 229,564t awaiting allocation — exceeding available volume by 43%. Turkish mill buying has remained subdued through mid-July, extending the bearish pressure on import scrap. US domestic scrap continues to show resilience: the RMDAS Prompt Industrial Composite (No. 1 busheling) remains in a narrow $465-471/ton range since February, while No. 1 HMS gained $3/ton and shredded gained $1/ton month-on-month. HRC at $1,145/st (US Midwest) provides underlying support. The divergence between weak export and firm domestic markets creates the tactical opportunity. Procurement posture: OPPORTUNISTIC. Secure Q3 volumes at these depressed levels before EU safeguard effects structurally tighten scrap availability.
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