While Turkish mills have continued to accept gradually higher price levels for deep sea scrap, finished steel demand in Turkey is still sluggish. Some market players think that the announcement of the Turkish ministerial cabinet may have a positive impact on demand, while others think June will be another silent month in terms of rebar demand because the market is saturated with inventory. Meanwhile, Turkish mills are showing signs of resistance to significant scrap price increases, citing the silence on the finished steel side.
SteelOrbis has learned that an Iskenderun-based producer has concluded an ex-UK deal for HMS I/II 80:20 scrap at $383/mt CFR and shredded scrap at $403/mt CFR. This price level indicates a $4.25/mt rise on average from the previous levels.
Also, an ex-Finland cargo is believed to have been bought by another Iskenderun-based steelmaker with HMS I/II 80:20 scrap standing at $387/mt CFR. This information was not confirmed by the buyer or seller at the time of publication. Although there are lower price levels voiced by some market players for this cargo, the deal is widely believed to have been done at $387/mt CFR. Accordingly, SteelOrbis will revise its ex-Baltic scrap prices to $385-387/mt CFR, increasing them by $5.5/mt from the previous level.
SteelOrbis has already reported several times that scrap generation in the EU as well as scrap flow to European export yards are slow. The situation remains the same: €305-310/mt DAP prices only result in small tonnages for shipment to export yards. Collection prices are not giving much room to European scrap sellers to lower their quotations for Turkey. A major European scrap supplier said, “The additional capacities that are coming online in Turkey will also be decisive for Turkey’s scrap consumption.” While a fall in the local US scrap market was initially expected, the expectations are now mixed. For example, whereas some more optimistic players believe that HMS could trend at sideways to down $20/gt (with a small minority saying they believe that sideways could happen), others believe that down $20-30/gt for HMS and P&S is “largely in the bag.” SteelOrbis hears that some US-based suppliers’ ideas for HMS I/II 80:20 scrap are at $390s/mt CFR Turkey. The most recent billet import deals done by Turkish mills were at $540-545/mt CFR from Malaysia for June shipments. With the positive developments in China, Malaysia and Indonesia have increased their FOB-based billet offers and may support the general billet pricing in Turkey and help suppliers there avoid discounts. “With the cautiousness in the market continuing, maybe it could dissipate after the announcement of the ministerial cabinet,” a source commented. Demand in the local Turkish rebar market is sluggish. Most tonnages are changing hands between traders and end-user demand has not recovered yet. One trader said, “The trend of the Turkish lira-US dollar exchange rate will have a big impact on demand and rebar prices. We will have to wait and see next week.”