With the EU scrap prices dropping sharply today, with a deal from the EU, the correlation between the ex-EU and ex-US scrap prices have been disrupted. This new dynamic is raising questions amongst market players, who think the same disruption is seen between short sea and deep sea scrap quotations.
SteelOrbis has learned that the ex-Netherlands deal done by an Izmir-based producer for HMS I/II 80:20 scrap was closed at $327/mt CFR. This price is $8.5/mt lower than the previous ex-EU deal. SteelOrbis has revised its reference prices for ex-UK/EU scrap to $327-330/mt CFR, considering a potential of higher price levels for other origins such as Germany.
Meanwhile, a Marmara-based producer has concluded an ex-Croatia booking for 20,000 mt of HMS I/II 80:20 scrap at $325/mt CFR. This supplier is generally considered to be a short sea seller, and this price has not impacted the European reference prices. Meanwhile, an Izmir-based producer has reportedly concluded deals from Romania in the range of $320-325/mt CFR. An Iskenderun-based mill bought two cargoes for ex-Cyprus HMS I/II 75:25 scrap at $310/mt CFR. These transactions confirm that buyers’ hands are very strong as they could have dropped ex-UK/EU quotations to abovementioned levels.
Under the current circumstances, SteelOrbis have revised its ex-US and ex-Baltic scrap prices down by $5-7/mt to $335-337/mt CFR and $331-333/mt CFR, respectively.
Market sources report that with a major Marmara-based mill cutting its capacity utilization rate has created a void in the market, giving more leverage to alternative buyers. With the rising number of available scrap cargoes in the EU, and due to the lower collection prices of European scrap yards, Turkish mills are in an advantageous position. Currently, collection prices of EU-based export yards are in the range of €240-245/mt DAP, some market sources report. A Germany-based subcollector confirmed that they have sold some scrap to Belgium at €247.5/mt DAP yesterday. Meanwhile, local prices in Germany have indicated a €10/mt fall with the first list prices announced by buyers, giving a negative signal. “China became an alternative once again due to their lower billet offers, protectionism all around the world has been and is still a negative impact on steel market. Wars and political turmoil are not giving a breather to mills. We do not expect things to improve for the rest of this year,” a source from a major mill commented today. All Turkish mills SteelOrbis talked this week signal the same thing, lack of steel demand in the local market or in exports, saying even with the tonnages they managed to sell there is no profit to be found. The negative sentiment surrounding Turkey’s import scrap market is deepening, with Turkish mills continuing to exert pressure on scrap prices. SteelOrbis expects a downward correction in ex-US scrap prices in the coming week or Turkish mills focus on European scrap instead.