Turkish mills continue to purchase deep sea cargoes, with prices indicating a stable trend, as seen in the new ex-US scrap deal disclosed to the market today, November 12.
SteelOrbis has learned that an Izmir-based mill has concluded the ex-US deal for 14,000 mt of HMS I/II 80:20 scrap at $500/mt CFR and 30,000 mt of shredded scrap at $520/mt CFR. The previous ex-US sale was done by the same supplier at the same price level for benchmark HMS I/II 80:20 scrap.
Market players state that the market is shaped by the supply-demand equilibrium, while there are also some concerns voiced. Deep sea scrap prices have remained firm in Turkey as suppliers were not willing to cut their prices due to the lower scrap flow to export yards as well as the higher collection costs. As the availability of the scrap decreased with cold weather conditions, SteelOrbis has heard that some scrap exporters have had to increase their collection prices, as can be seen in the local EU and US scrap markets. There are several offers from the Baltic region to Turkey, though sellers do not consider levels below $500/mt to be workable for now. A source stated that prices around $495s/mt CFR Turkey can be considered workable for EU origin scrap.
Turkey needs at least 10-12 deep sea cargoes for December shipments, so there is no rush. Some major steelmakers have already started to look for January shipments. Some players stated that a demand-supply equilibrium can be seen in the market for now, though the lack of significant tonnages in the export segment, higher natural gas prices, expensive freight charges and the depreciating Turkish lira are still mentioned as sources of concern in the market. On the other hand, Turkish mills have postponed maintenance works, which are now expected to start in the second half of January or in early March, according to some sources.
Regarding the European Commission’s plan to impose a ban on scrap exports, some market players stated that the plan is on the table but no decision should be expected in the short term: perhaps higher grade scrap supply could be impacted in the first stage as those grades are more sought by European mills.
