Last week was marked by the first real downward correction of Turkish scrap prices since the rally started last year in October. According to the Kallanish index, HMS 1/2 80:20 settled at the end of last week at $460/tonne cfr Turkey, down over $20/t from its peak the week earlier.

While this could be the first sign of a more general cooling of global steel sentiment, many observers in the market continued noticing that the oulook for scrap remains strong this year, thanks to the expected further opportunities for exports into China taking effect from the beginning of 2021.

Irepas, the international rebar producers and exporters association, confirmed in its latest outlook that China’s permission of scrap imports will be central to this year’s outloo. The association expects the change to reset trade routes, directing Japanese and some US West Coast scrap to the country. This, along with Russia’s revision of the minimum tax on scrap exports and the healthy US local market, should help prop up scrap prices overall in 2021.

“Mills in the EU and the US will probably have to find new strategies for the time when there will be more competition for their domestic scrap,” Irepas says in its January short-range outlook. “Will they force their governments to take action on scrap exports as the Russians have done, which is clearly against WTO rules?”