The political and economic turmoil resulting from the failed military coup in Turkey on Friday, July 15, 2016, seems to have settled in the course of the week. Turkish steel producers, having gained relief in terms of scrap inventories after their continuous scrap import transaction activity from late June into July, were expected to delay new scrap deals while they awaited a further improvement in the political situation. As expected import scrap purchases in Turkey slowed down last week, with only a limited number of deals concluded. A Turkish steel producer concluded an ex-Baltic deal last week for a cargo consisting HMS I/II 80:20 scrap at $228/mt CFR. The recent buy is $12/mt higher than the latest ex-US deal in mid-July. This purchase gives confidence that US export pricing will not be aggressively weakened by ex-EU and ex-Baltic prices, as in early July, which will bode well for US domestic East Coast scrap pricing during the August buy cycle.
On the East coast, SteelOrbis has been informed that domestic demand for scrap in August is trending at the same volumes as those encountered in the July buy-cycle, but given the lack of export cargo demand, prices are expected sideways to down $10/mt across all grades. East Coast prices settled for HMS 80:20 at $188/mt, HMS I scrap at $198/mt, shredded scrap at $229/mt, busheling scrap at $254/mt and P&S at $203-208/mt. All prices are ex-yard.
In the Midwest, SteelOrbis has been informed that order inquiries and planned order flows for August are also following the same volume as in July, but given imported busheling and shredded cargos from Great Britain, the market is expected down $15-20/mt on primes and down $10/mt on cuts and shredded. The Midwest settled HMS I scrap at $233-243/mt, shredded scrap at $244-249/mt, busheling scrap at $285-290/mt and P&S scrap at $244/mt. All prices are ex-yard.
Scrap processors have informed SteelOrbis that scrap inflow has met approximately a 20 percent reduction across all regions in terms of volume due to the downward price trend that began in May, but is expected to be in balance with the lackluster demand in August. Planned mill outages of 1-2 weeks are anticipated to continue into early September giving scrap processors the opportunity to increase scrap inflow in preparation for expected surges in late September deliveries.