In two ex-Europe deals disclosed in the import scrap market in Turkey, the benchmark HMS I/II 80:20 price from the region has increased.
Late on Friday night, SteelOrbis heard that an Iskenderun-based Turkish mill concluded an ex-UK deal for HMS I/II 80:20 scrap at $513/mt CFR and shredded scrap at $533/mt CFR. The deal has not been confirmed either by the buyer or seller at the time of publication, though it is widely believed by market participants to have been done. Prior to this deal, a producer in Izmir bought HMS I/II 80:20 from the UK at $500/mt CFR.
Additionally, today, May 25, SteelOrbis has learned that an Iskenderun-based producer has concluded an ex-Belgium deal for 19,000 mt of HMS I/II 80:20 scrap, 11,000 mt of shredded scrap, 8,000 mt of bonus grade scrap and 2,000 mt of busheling scrap at the overall average level of $516/mt CFR. The cargo will be shipped closer to mid-July and the benchmark HMS I/II 80:20 scrap price is estimated to be around $510/mt CFR Turkey.
As the last ex-Baltic transaction was closed at $507.5/mt CFR last week, the newly-disclosed ex-EU scrap deals are significant for ex-Baltic prices, pushing estimations for both the Baltic and the US to higher levels. US suppliers are still silent as regards activity in Turkey’s scrap market, while local demand is quite strong in the US, leading market players to expect an increase in domestic quotations in the coming June buy-cycle. Also, SteelOrbis observes that US suppliers are making sales to alternative destinations such as Mexico, Brazil and Egypt, and that their actual prices fixed in deals to these countries are $20-25/mt higher than Turkish mills’ targeted levels, according to some players. As a result, Turkish mills and US scrap suppliers are not expected to find a halfway meeting point in the short term. One European supplier stated that, under the current conditions with the US out of Turkey’s import scrap market and with most Baltic-based suppliers having already done their sales for the coming round, prices may test $520/mt CFR Turkey for HMS I/II 80:20 scrap. All players in the market are monitoring the movements in China closely and state that the more-than-sufficient spread between finished steel and scrap prices is preventing scrap prices from moving down. Turkish mills’ finished steel order books are full for the coming period and, although they have concluded scrap bookings for longer delivery terms, they still need more deep sea cargoes. According to some market players, Turkey still needs at least 15 cargoes for July shipments.
