As anticipated largely, the declining trend of Turkey’s import scrap market has continued, as seen in a new ex-EU scrap deal.
SteelOrbis has learned that an Iskenderun-based mill concluded the booking from the Netherlands for 19,500 mt of HMS I/II 75:25 scrap and 2,500 mt of bonus grade scrap at the average level of $318/mt CFR. According to the information, the HMS I/II 80:20 scrap price in the deal is estimated at $315/mt CFR, which is again $15/mt lower than the previous deal. Some market players state that this may be a stressed cargo, which would explain the lower price.
Several European scrap suppliers state that this level is not workable for them, citing their collection costs and sales done to alternative destinations with more attractive price levels. Also, ahead of the holiday season, the collection of scrap has slowed significantly. While some suppliers state that if Turkey returns to the market it may fail to find enough scrap, Turkish mills disagree, saying their need for scrap depends on their finished steel sales. Almost nothing has changed in Turkey’s finished steel market: demand is still insufficient to support a stabilization of product or scrap prices. Since this main problem is not improving in Turkey, import scrap prices are expected to remain soft. With the ex-Netherlands deal in question, US suppliers will face bids in the range of $330-335/mt CFR, but whether they will accept them or not is yet to be seen. It is also known that two ex-US bulk cargoes were sold to India, an unusual destination for bulk cargoes from the US. Also, a SteelOrbis contact stated that, over the past week, India has bought four to five cargoes from various sources - traditionally suppliers to Turkey such as the US, the EU and the UK - each for 40,000 mt. This adds up with the previous ex-EU transactions to China, Bangladesh and Vietnam.
Meanwhile, the short sea segment is under significant pressure. Although no new deals have been heard and suppliers have been trying to resist low bids from Turkish mills, the new ex-EU scrap deal will impact the short sea segment. Now with European HMS I/II 80:20 scrap at $315/mt CFR, Romanian HMS I/II 80:20 scrap is expected to decline below $300/mt CFR. A Bulgarian supplier stated that Black Sea origin HMS I/II 80:20 scrap may decline to $250s/mt CFR in the near term.
