Turkey has bought a cargo from Canada consisting only of higher grades and with no HMS I/II 80:20 scrap. According to the information on hand, this cargo is considered to signal another price increase for ex-US scrap prices.
SteelOrbis has learned that a Canada-based seller signed a contract with an Iskenderun-based mill yesterday, March 14, for 32,000 mt of HMS I/II 95:5 scrap at $677$/mt CFR, 10,000 mt of shredded scrap at $692/mt CFR and 8,000 mt of P&S grade scrap at $692/mt CFR. As the premiums in the US between HMS I/II 80:20 scrap and higher grades such as shredded or busheling are now at around $25/mt, the premium for HMS I/II 95:5 scrap and HMS I/II 80:20 is considered higher by some market players. Hence, this ex-Canada booking signals $662-667/mt CFR for the benchmark HMS I/II 80:20 scrap, which is $14.5/mt higher on average than the initial estimations.
Meanwhile, two older deals have been disclosed to the market today, March 15, which were done in the middle of last week though these deals are not indicative of actual market prices anymore. An ex-Poland cargo was sold to Turkey with HMS I/II 80:20 scrap priced at $643/mt CFR and an ex-Estonia deal was done by an Izmir-based producer for HMS I/II 80:20 at $645/mt CFR. These prices were in the range of SteelOrbis’ estimation for this region, but following the ex-Canada deal mentioned above ex-Baltic HMS I/II 80:20 scrap prices will be revised to $657-662/mt CFR.
“I think deep sea scrap prices will remain in their current range this week. There are some offers in the market but no indication of sellers bending to Turkish mills’ desire for lower prices,” a seller stated. On the other hand, Turkish mills are voicing their concerns over price increases both in terms of costs and finished steel. “While finished steel prices are rising, our sales tonnages are not so high to support current deep sea scrap price levels,” a Turkish producer commented. Turkey’s import scrap market is relatively quiet this week, but more contacts are expected to be signed nevertheless. “Maybe the prices we will see in the current week will be stable, but I believe they will continue their uptrend in the short term,” the source reported. SteelOrbis in particular has heard that offers for higher grades are increasing at a faster pace.
Another question is the situation regarding cargoes available in St. Petersburg. One SteelOrbis contact said that, even though Turkey has not initiated any sanctions against Russia, and despite the lack of any barriers on the Russian side against scrap exports apart from the €100/mt export duty initiated before Russia’s invasion of Ukraine, it is not easy to maintain the flow of money between the countries. “The problem is not so much in payments between our countries, but in the fact that all the established working schemes included European traders and European banks,” the source commented, adding, “Financing from European banks does not seem real at the moment. US dollar payments also do not seem available, and banks cannot get any guarantees for executing them.” And there is also a vessel problem, with the sources stating, “Ships are unwilling to go to Russian ports, since most of them are also bound by sanctions.” As a result, Turkey’s chances of importing scrap from St. Petersburg seems close to zero for now.
