Following the confusion observed in Turkey’s steel markets after economy minister Albayrak’s resignation, new deep sea deals have been disclosed to the market today, November 11, indicating a sharp rise in prices.
An Iskenderun-based Turkish mill concluded an ex-US transaction yesterday for a cargo consisting of 2,000-4,000 mt of P&S grade scrap at $315/mt CFR, 12,000-15,000 mt of shredded scrap at $310/mt CFR, with the rest of the cargo which totals 30,000 mt being made up of HMS I/II 80:20 scrap at $305/mt CFR. The cargo will be shipped in December. In the previous ex-US deals, the benchmark HMS I/II 80:20 scrap price was at $293.5-296/mt CFR.
Also, the same producer concluded a booking from Latvia yesterday for 30,000 mt of HMS I/II 80:20 scrap at $305/mt CFR and 5,000 mt of bonus scrap at $315/mt CFR, also for December shipment. Prior to this deal, a Poland-origin cargo was closed at the beginning of the month at $293.5/mt CFR for HMS I/II 80:20 scrap.
Market sources state that the firming up of the international steel markets has caused the increase in deep sea scrap quotations. Specifically in relation to scrap, concerns regarding supply are the driver. SteelOrbis has learned that local scrap demand in the US is very strong and supported by high levels of finished steel prices. Also, a major European scrap supplier stated that the lockdowns and measures taken in the region against the spread of Covid-19 may cause bigger-than-expected disruptions in scrap flow, while adding that it is too early to make assumptions but that they have retreated from the market and are not sharing offers for now. Turkey’s export sales both on the finished steel and semi-finished sides also support the uptrend of the scrap market. Turkish mills are confident in the light of their export sales and are unwilling to cut their prices. Some market sources state that this rise in prime grade scrap quotations was earlier than expected and add that $310/mt CFR is the next level that will be seen if the current conditions are sustained. New deep sea transactions are expected in the current week.