Several deals concluded in Turkey indicate that the upward trend of import scrap prices is continuing. Sentiment in the market is still strong, while most market players believe that there is at least some small room for another hike in prices. While steel producers believe the increasing trend will continue in line with the demand coming out of Turkey, sellers think supply dynamics may push prices higher than Turkish mills’ expectations.
SteelOrbis has learned that an Izmir-based mill concluded an ex-Belgium booking for HMS I/II 80:20 scrap at $418.5/mt CFR, with shredded and bonus grade scrap at $438.5/mt CFR. The cargo totals 35,000 mt and will be shipped in March.
An ex-Germany booking has been done by an Marmara-based producer for HMS I/II 80:20 scrap at $419/mt CFR and bonus grade scrap at $439/mt CFR, again for March shipment. As a result of these deals, ex-EU HMS I/II 80:20 scrap quotations have increased by $5.75/mt from the level of $413/mt CFR recorded yesterday, January 31.
Ex-US scrap prices have also increased today, February 1, in new deals. An Iskenderun-based producer bought a cargo which only consists of shredded and bonus grades at $446/mt CFR. This cargo will be shipped in March. This signals $426/mt CFR for ex-US HMS I/II 80:20 scrap.
Another mill in Iskenderun is rumored to have signed an ex-US deal, with HMS I/II 80:20 scrap at $424/mt CFR, and shredded and bonus grades at $444/mt CFR. This deal has not been confirmed by the buyer or the seller but is largely believed to have been done. As a result, ex-US scrap prices have increased by $4/mt since yesterday.
The Turkish government’s decision to tax import flat steel has supported the market, forcing Turkish flats producers to return to the deep sea market. Meanwhile, Turkey’s scrap demand for March deliveries is lively. One steel producer commented, “There is room for a further increase until demand slows down.” Another producer said that the current upward push is not sustainable, adding, “Some sellers have started to voice $450s/mt CFR. The fundamentals on the sales side do not support this kind of increase. People should be reminded that sharp increases tend to end with significant price falls.” A scrap seller agreed, stating, “I think we can see a break at around $430s/mt CFR. Flat steel producers’ demand is lively due to the tax, but long steel demand is not absent.” It is also noteworthy that Turkey’s General Directorate of Meteorology has warned that snowfall is anticipated across the country. The snow may disrupt transportation and construction, and long steel trading in particular. Meanwhile, China’s return from its holiday has not been as positive as expected. But SteelOrbis’ expectations for February have not changed much. Due to the holiday in China on February 5, some Chinese players have extended their holiday and will return to the market later. Demand in China is hence slower, causing volatility in the market for now. It is observed that several Turkish mills decided to close their rebar sales earlier today, which also raises the prospects of a possible increase in list prices.
The short sea segment is still quiet. There are no concrete offers or bids in the market. A Romania-based seller stated that their aim is $405-410/mt CFR for HMS I/II 80:20 scrap. However, with the lack of new deals, SteelOrbis will keep its reference prices for this grade at $400-405/mt CFR. In the short sea segment, there is low availability of bonus grades. “The collection prices for bonus grades in the Black Sea is higher, hence suppliers may ask for higher premiums in the coming negotiations,” a seller reported.
