New and old deals surfacing in Turkey’s import scrap market have showed that deep sea scrap quotations are stabilizing, having mostly exhausted their upward momentum. Market sources report that prices are very close to their peak if not already there.
SteelOrbis has learned that a Marmara-based producer has concluded a deal from Sweden this week for HMS I/II 80:20 scrap at $346.5/mt CFR, with shredded scrap at $366.5/mt CFR and bonus grade scrap at $366.5/mt CFR. This price is merely $0.5/mt higher than SteelOrbis’ previously estimated level.
An ex-Netherlands booking by another Marmara-based producer was closed late last week at $342/mt CFR, resulting in a $1/mt upward movement for ex-EU/UK prices. An older ex-UK transaction is reported to have been done last week by an Iskenderun-based mill, with the HMS I/II 80:20 price at $338/mt CFR.
Market sources from sellers, buyers and sub-collectors alike believe that the deep sea scrap market has reached its peak. Collection prices at EU export yards are in the range of €260-270/mt DAP. With the euro-US dollar exchange rate at around 1.13 today, May 21, sources report that European sellers are in a better position now as compared to when the euro was stronger. On the other hand, domestic scrap prices in the EU have declined sharply in May as well as in the US domestic scrap market. Germany is carrying a risk of stagflation, and the new German government’s lack of a rapid response to the growing risk is creating questions for the EU market, where sources still report that scrap availability is on the low side. While market sources have not made up their mind about the likely trend for scrap purchase prices in June, with some still having hopes for an upward movement, the first impression from the US is negative. The growing debt pile of the US caused Moody’s to cut the country’s credit rating late last week, a first since 1919. Falling flat steel prices in the US are creating downward pressure on scrap prices, which had already fallen during April and May. “A third decline in June is likely under the current economic circumstances,” a US-based source reported. SteelOrbis observes there is a risk of a downward correction in prices if the lack of interest from Turkey continues in the coming weeks. The local Turkish steel market is failing to gain momentum. “The recent price increases we [mills] accepted recently is a result of some demand we received from abroad, not from the local market. If we talk in particular about domestic rebar demand, I can say people are more interested in deposit rates as compared to trading,” a source at a major mill commented today.
Meanwhile, a Turkish producer has bought a short sea cargo from Moldovia at $331/mt CFR. Romanian sellers’ workable price ideas are above $333/mt CFR, but Turkish mills’ bids are far below this level. For now, the workable levels for Romanian and Bulgarian HMS I/II 80:20 scrap are in the range of $325-328/mt CFR. Italian cargoes are offered to Turkey at an average of $347/mt CFR, though again buyers show no interest in such price levels.