Turkish mills have continued to buy deep sea scrap cargoes from the Baltic region, while prices have indicated a small downward correction over the past week. Pressure has continued to be exerted on pricies, but Turkish mills are still observed to be more interested in premium grade cargoes and prices are stable for now.
A Marmara-based producer is reported to have concluded two ex-Baltic deals, one from Denmark with HMS I/II 80:20 scrap at $351-352/mt CFR and one from Sweden with the same grade at $351/mt CFR. No further details have been shared by the time of publication. The range of $351-352/mt CFR indicates a $3.5/mt decline for ex-Baltic scrap prices.
Over the current week, workable levels for short sea HMS I/II 80:20 scrap prices have also declined. While the most recent ex-Romania HMS I/II 80:20 scrap prices were at $325/mt CFR, market players agree that currently no Turkish mills would pay this figure for ex-Black Sea cargoes. Turkish mills’ price idea for short sea scrap is now at least $5/mt lower than this deal price. An Israeli scrap seller reports that currently bids for HMS I/II 75:25 scrap this week were lower than $310/mt CIF Iskenderun. Several short sea suppliers report that Turkish mills are showing little interest in the short sea segment.
The fundamentals of the Turkish steel and scrap markets have remained unchanged. Steel demand is still on the low side, failing to recover due to tightness of cash flow and increasing costs, particularly in the construction segment. Turkish rebar traders do not believe they need to increase their stocks, commenting that the present period is not a time for risks. Turkey’s deep sea scrap purchases for August shipment number approximately 11-12, which is very low compared to 35-40 on average in a normal month. “Things have not been normal for a while now and we know it. We believe Turkish mills would want to buy another 8-10 deep sea cargoes in the coming period. And there is enough supply out there,” a seller commented. While European scrap exporters pushed down collection prices to €270s/mt DAP, a Germany-based sub-collector reported that sales to export yards at such a low price are rare. “We cannot anticipate healthy scrap flow even to us at the currently-voiced levels. And August is a holiday period. I can say that most German producers will be out of the market. Therefore, maybe the market will be balanced in their absence,” the sub-collector said. Several sources in the EU comment that reducing collection prices further may disrupt the pace of scrap collection. Meanwhile, dock-delivered prices in New York for HMS I/II 80:20 scrap have already declined to around $265-290/mt.