Turkey has started to conclude import scrap deals for April shipment, with deep sea scrap prices moving up in each booking. The positive sentiment is stronger in the market. Especially today, March 6, market sources report that price inquiries have accelerated due to the depreciation of the euro against the US dollar. But there are hardly any offers in the market as sellers are evaluating the situation. Therefore, Turkish mills are trying to fill the gap in their delivery terms by closing deals one after another where they find a cargo.
SteelOrbis has learned that an ex-Belgium deal has been done by a Black Sea-based Turkish steel producer for HMS I/II 80:20 scrap at $362/mt CFR, with shredded and bonus grades at $385/mt CFR. The cargo will be shipped in April. This price indicates a $2/mt increase from yesterday’s estimated levels for this grade. The difference between the HMS I/II 80:20 scrap and higher grades is $23/mt in this booking, which is $3/mt higher than the gap up to now.
An Izmir-based producer has concluded a deal from Muuga in Estonia for HMS I/II 90:10 scrap at $370.5/mt CFR, with bonus and busheling scrap at $393.5/mt CFR. The HMS I/II 80:20 scrap equivalent stands at $366.5/mt CFR and the cargo will be shipped in April. The higher premium paid for the bonus grade attracts attention in this deal too, supporting the idea that premium scrap qualities will be priced higher due to the anticipated demand in the US. This deal has increased ex-Baltic scrap prices by $1/mt and will also push ex-US scrap prices up. SteelOrbis has revised its reference prices for ex-US HMS I/II 80:20 scrap to $367-368/mt CFR today.
In addition, an Iskenderun-based producer closed an ex-UK booking yesterday, March 5, for HMS I/II 80:20 scrap at $360/mt CFR and bonus scrap at $380/mt CFR, for April shipment. This price is not expected to be repeated in the coming deals from the UK or the EU.
Following the sharp depreciation of the euro against the US dollar, scrap sellers have taken a step back from the market. Market sources report that the new exchange rate means an additional $13/mt cost for European scrap sellers. “No one can reflect this increase to their buyers directly. There is no meaning in offering anything right now,” a European scrap supplier commented. More than one player reported that there are several producers seeking available cargoes today, but they all failed to find sellers. “The price is very firm right now. The tariffs and the positivity of the US is a factor, but now the euro-dollar exchange rate is as important as the former,” a source commented. There are rumors of Turkish mills receiving long steel demand from abroad, while a flat steel sale has been done by a Turkish producer to the US, with these developments supporting the optimism in Turkey. An Iskenderun-based producer concluded a sale to the US earlier this week of 7,000-10,000 mt of HRC at $555/mt FOB. “Despite the low volume, it is a new development providing hope for Turkish mills,” Currently, ex-Turkey rebar prices are ranging within $565-570/mt FOB for late March and April shipments, unchanged for two weeks in a row. However, domestic rebar prices are not fully following the upward price trend and some mills continue to sell at lower levels to achieve higher sales volumes. As of today, March 6, Turkish domestic rebar spot prices have mostly risen by TRY 100-200/mt ($2-5/mt) against the backdrop of costlier import scrap and ongoing currency fluctuations, while they have only remained unchanged in the Karabuk region, as compared to Monday, March 3. The official rebar prices in the Marmara and Izmir regions vary at $565-580/mt ex-works, including Icdas A.S.’s prices, up by $10/mt on the lower end, while the workable rebar prices in these regions vary at $560-575/mt ex-works, also up by $5-10/mt, over the same period, for cash payment only. The situation in Turkey’s import billet market has not changed drastically over the past week. An ex-Malaysia billet cargo for April shipment, according to sources, has been recently booked at $486/mt CFR Iskenderun region, consisting of a volume of around 20,000-25,000 mt, SteelOrbis understands. In addition, there has been talk about a full cargo booking from Malaysia to an Izmir region-based steel producer at $485/mt CFR.
As an additional note, Turkey’s central bank (CBRT) has dropped its interest rates for the third consecutive time, decreasing them by 250 base points to 42.5 percent. It stated that the effects of its monetary policy stance on the credit and deposit markets, as well as on domestic demand, are being closely monitored. It emphasized that, although inflation expectations and pricing behavior show signs of improvement, they still remain a risk factor for the disinflation process.