As Turkey continues to buy cargoes for January shipment, deep sea scrap prices continue to move up at a rapid pace. Turkey still needs at least 14 more deep sea cargoes for shipment in January, though reluctance to accept higher prices is observed among buyers today, December 7.
An Iskenderun-based Turkish producer has concluded an ex-US deal for 8,000 mt of HMS I/II 95:5 scrap at $437/mt CFR and 22,000 mt of P&S grade scrap at $448.5/mt CFR, for January shipment. This level indicates that HMS I/II 80:20 scrap is now in the range of $428-430/mt CFR, moving up by $6.5/mt on average. Meanwhile, the same producer has concluded another ex-US booking for HMS I/II 80:20 scrap at $428/mt CFR, P&S scrap at $448/mt CFR and shredded scrap at $448/mt CFR, for mid-January shipment. The total tonnage is 30,000 mt for this deal.
The fundamentals in Turkey’s import scrap market have not changed much this week. Low scrap availability is still the biggest reason why prices are increasing ahead of the holiday season which will start on December 20, while Orthodox Christmas will follow in January. Deep sea scrap prices in Turkey have moved up by more than $50/mt since November 1 and this is exerting pressure on Turkish mills’ finances. “Every rise in price means Turkish mills will experience difficulties regarding their credit limits. While prices are rising, this point should also be considered,” a European scrap supplier commented. Ex-Europe scrap prices are expected to increase to $420-423/mt CFR. While billet may be considered as an alternative to scrap in order to lower production costs, a source at a Turkish producer said it is not possible or profitable to work only with billets. The risk of postponement of deep sea cargoes still exists, supporting short sea scrap demand. On the other hand, some sources believe that the number of offers in the market may increase in the coming days. “There are suppliers who have been silent for some time and they may be willing to accept to sign deals at current price levels. If the number of sellers seeking to conclude deals increases in the coming days, the rising price trend may pause,” one seller commented. All market players are also wondering whether Turkish mills will decide to cut capacity utilization rates, though so far no concrete decision has been announced by any major mill.
Meanwhile, earlier this week an ex-Israel cargo was sold to Iskenderun, consisting of HMS I/II 75:25 at $390/mt CIF. The workable levels for this grade are now considered to be a little higher.
SteelOrbis also hears that demand from Egypt, India and Bangladesh is on the low side. Although most offers for imported shredded scrap in containers to Pakistan have remained at relatively the same levels as compared to last week, market insiders have reported more deals signed at slightly higher levels over the past week given the mounting bullishness in Turkey. Offers for imported scrap in India have continued to move up slowly, with sellers facing tight allocations, but deals have remained very limited amid buyers’ low bids, sufficient stocks, and expectations that the current rise will not be sustained.