Another ex-US scrap booking in Turkey has been closed with a significant price decline this week. The main question in the market now is whether US origin HMS I/II 80:20 scrap prices will drop below $370s/mt CFR, since most players expect this level to be recorded anyway.
SteelOrbis has learned that an Izmir-based producer concluded the ex-US scrap booking for HMS I/II 80:20 scrap at $378/mt CFR, with shredded and bonus grade scrap at $398/mt CFR, for March shipment. As a result, ex-US benchmark scrap prices have declined by another $7/mt for Turkey.
Overall, Turkish mills believe that Ramadan starting on March 10 and the local elections to be held on March 31 will cause steel trading to slow down in Turkey. According to a source at a major Turkish mill, “Those two factors are creating uncertainties in an environment where the international fundamentals are also indicating a negative movement.” Most Turkish players believe energy tariffs in Turkey will be raised after the elections, though the likely margin is unclear. This is preventing Turkish mills from attempting to cut their steel prices, particularly for rebar. However, producers continue to exert pressure on the scrap segment. With US suppliers being aggressive on prices, other regions are forced to follow. Especially, the number of offers waiting on the Baltic side is attracting attention. Another source at a major Turkish mills said that most US-based cargoes are already sold or will be in a couple of days “contrary to the Baltic side.” European collection prices are also set to decline further, according to sub-collectors in the EU. A European scrap seller commented, “There is no support from the collection side, nothing from steel demand either. China is negative, international steel prices are vulnerable. Hence, it will not be surprise to see a further decrease in the deep sea scrap segment.”
Meanwhile, most recent ex-Romania deals were done at $365s/mt CFR Turkey. Currently, Turkish steelmakers’ price ideas for this grade are lower, closer to $355/mt CFR, with no response from sellers. A source at a Turkish mill said, “They do not have a large volume on their hands. Most of them sold in past weeks while prices were moving down.” Workable levels for ex-Romania HMS I/II 80:20 scrap are estimated at around $360/mt CFR.