As Turkish mills continue to conclude deep sea scrap bookings this week, deep sea scrap prices have continued to move up at a slow pace. While some Turkish mills have started to report a reduced need for cargoes for January shipment, sellers do not agree, saying that Turkish mills’ scrap inventories are still very low despite the large number of deals done over the past month.
An Izmir-based Turkish steel producer has concluded a few deals over the past several days. An ex-US scrap deal by the producer was closed at $368/mt CFR for HMS I/II 80:20 scrap, indicating another $3/mt increase for US origin scrap.
An ex-Netherlands scrap booking was also closed by the same buyer at $362/mt CFR for the benchmark HMSI/II 80:20 scrap. A second ex-Netherlands transaction by the same producer was signed at $360/mt CFR for the same grade. As a result, SteelOrbis’ reference price for ex-UK/EU HMS I/II 80:20 scrap has been raised by another $2/mt on the upper end to $358-362/mt CFR, with the lower end represented by the recently recorded ex-UK booking.
Meanwhile, an Iskenderun-based mill is reported to have concluded an ex-Baltic scrap booking, with the HMS I/II 80:20 scrap price at $365/mt CFR. While this deal was not confirmed by the buyer or seller by the time of publication, it is widely believed to have been done, resulting in a $1/mt increase for this grade.
European scrap exporters’ bids for scrap are still in the range of €265-269/mt DAP, market sources report, which provides a solid bottom for the current CFR Turkey-based prices, supported by the euro-US dollar exchange rate being at 1.16667 today, December 3. With ex-US scrap prices reaching $368/mt CFR, the $370/mt CFR threshold is now on the horizon. Not many available cargoes are left in the market for January shipment. “There are two options. Turkish mills may complete their purchases for January shipments and take a step back before the Christmas holiday starts, causing a firm sideways movement for the rest of December. On the other hand, any disruptions in deliveries may cause them to seek another cargo for January, which are basically few in number even now,” a scrap supplier commented today. A source at a Turkish mill agreed that deep sea scrap prices are set to move up further, though he also added, “There is no similar reaction on the finished steel side. Scrap sellers played this round very well supported by low scrap availability. On the other hand, I do not think availability will be this low for cargoes for February shipment.”
