Deep sea scrap suppliers to Turkey under pressure

Wednesday, 28 August 2019 17:27:25 (GMT+3)   |   Istanbul

Weaker import scrap segment in Turkey is a result of the ex-US tags for HMS I/II 80:20 having rather unexpectedly hit $270/mt CFR in the latest deal, while around two weeks ago the sellers were resisting going below $290/mt CFR level. Currently, several American suppliers are in the market with $270/mt CFR for HMS I/II 80:20, with no deals. “There was an offer at $273/mt CFR for HMS I/II 90:10 but there were no takers,” a source said. In addition, there is an expectation, that US local scrap prices will weaken in September, sources say.

The scrap suppliers from the EU did not have much choice but to follow the downtrend. Offers for HMS I/II 80:20 were heard at $270/mt CFR Turkey as well. Moreover, according to some sources, the scrap collection prices in Europe have decreased, which can result in somewhat lower sales tags on exports also; the depreciation of euro against the US dollar may support lower pricing as well, sources believe. The Baltic region-based scrap suppliers are not actively present in the market of Turkey, though some offers of HMS I/II 80:20 are heard at $270-275/mt CFR.

Despite that the import scrap prices have recently hit the lowest level over the past two years, Turkish mills still refrain from further purchasing, having troubles selling both flats and longs. Moreover, the market of Turkey is full of talks regarding some steel producers stopping their melting operations or temporarily decreasing the utilization rates, which is foreseen to result in lower scrap requirements in the short run. In the meantime no sizeable improvement of demand for Turkish steel is expected any time soon, neither in the local market, nor on the export outlets, SteelOrbis understands.

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