As of today, the export markets for the beginning of the month are nervously quiet. The market is assessing final information before moving, but the consensus is a definite downward trend. Turkey, the largest importer of scrap has not yet entered the market. We have seen Turkey complete Ex-Black Sea and local scrap transactions to fulfill their immediate needs.
To date, Turkish importers have been reluctant to move forward with orders given the slackness in export and domestic demand for their finished steel sales. As of pricing information received today, Turkish semi-finished and finished goods are absorbing further declines. Competition is difficult as Chinese offers to all countries are lower compared to last week and actual market transactions have been found to be cutting deeper discounts. Iron Ore China CFR is also down $2-$1.5/mt from last week. China ex-billet prices hit their peak in late April and have dropped from $390/mt to $290-$300/mt FOB offered pricing to all countries as of today.
For the last two weeks, Turkey based firms have consistently informed SteelOrbis that we should not expect any bookings above $250/mt CFR in this buying cycle. SteelOrbis has also received continuous feedback from Turkish steel mills that they have confidence in their ability to press below the offered prices should they want to proceed, yet one of our sources today cautioned against assuming a perpetual downtrend since as he stated, "When the Turks return to the market it will be a bum-rush. With essentially all mills out the last 4 weeks, there will be a lot of requirements and that could put a floor on export tags." Generally, domestic mill inventories are considered good, though, also confirmed by the fact that domestic mills did not jump on lower scrap offers made by a large firm today. One source stated he heard up to $50/mt down from a potential buyer approached, hence cautioned that $25-30/mt down was probably the more realistic tender.
Overall, the East Coast expects a small window for this month's export transactions with Shredded coming in at $245-$255 to Plate & Structural at around $255, both CFR Turkey, which will begin to establish the domestic market. One market player commented that given the strong upswing that started in February on the backdrop of optimism about China's economic recovery and forecasted production losses due to pollution management, both assumptions which have yet to be realized, the present correction is fundamentally reasonable.