A surprise ex-US deal has caused confusion in Turkey’s import scrap market. “Sellers are not in a rush to conclude new deals to Turkey, they are citing their high inventory costs,” a source from the supplier side stated. It is known for some time now that Turkey’s finished steel sales are slow, leading producers to exert pressure on scrap prices. However, this time the collection prices and the slow flow of scrap causes resistance from sellers.
SteelOrbis has learned that the deal was done on Monday, August 22, for 19,000 mt of HMS I/II 80:20 scrap at $402/mt CFR, for 21,000 mt of shredded scrap at $422/mt CFR and 5,000 mt of P&S grade scrap again at $422/mt CFR, for September shipment. Previous to this deal, most recent ex-US price was at $394-396/mt CFR. Some market players state that this price is specific and is about the mill compensating some disruptions in its earlier billet orders that failed to be met by the seller. Actually, there are more rumours about the transaction since the price was surprising, hence it is important to say that the information shared in this article is directly confirmed by one of the parties.
Sources inform SteelOrbis that the collection prices in the EU are in the range of €330-335/mt DAP Amsterdam, while the UK export ports buy scrap in the range of £280-290/mt. Although the low water level problem is expected to be solved in the coming days with the anticipated rains, European sellers believe that local EU scrap market is set to see a rise after the holidays. Some of the sellers are willing to wait due to their expectations of a price rise. Even the sellers on the short sea segment are reluctant to accept bids from Turkey. A European scrap seller reported that the historical depreciation of the euro against the US dollar is helping them in terms of export prices. A bid is given to an Adriatic scrap supplier at $375/mt CFR, which the seller refused. US warning of Turkey about doing business with the sanctioned Russian businesses is another factor that is considered to have a potential to support the scrap market. Nevertheless, both sides [buyers and sellers] are trying to be cautious and are in no rush to make moves as they are trying to avoid losses. An Iskenderun-based mill announced yesterday that that they are halting their rolling mill for 15 days. Also, Uğur Dalbeler, vice president of the Turkish Steel Exporters’ Association (CIB) stated while speaking to Turkish TV channel BloombergHT, that Russia is reducing its prices to its only market left [Turkey] after the sanctions and this is causing difficulties for the Turkish mills, adding that “We may be forced to halt production in October or November due to our decreasing competitive power.”
Despite the higher scrap prices abovementioned, Turkish rebar traders report that the market is not ready to accept that scrap price is rising. “The trading in the local rebar market has not recovered after this deal, which means people are not sure whether this price is here to remain or not,” a trader commented. There is a new housing project to be announced by President Erdoğan on September 13, though this project is not expected to have an impact on this year’s steel demand. “Construction season is almost finished, but this project can allow players to make a projection for the coming months,” a trader commented.