Turkey is concluding scrap deals to complete its needs for February shipment, while scrap prices continue to move down for all origins. The number of offers in the market is still on the high side, with at least ten offers voiced by market sources, though sellers are giving the impression that prices lower than the current levels are not acceptable to them right now.
The ex-Denmark booking done by an Izmir-based producer yesterday, January 14, consisted of 20,000 mt of HMS I/II 80:20 scrap at $335/mt CFR, 8,000 mt of a mixture of bonus grade and rail scrap at $357/mt CFR and 7,500 mt of busheling scrap at $365/mt CFR. This price level is $5-7/mt lower than the previous ex-Scandinavia booking reported on January 13, but expectations for HMS I/II 80:20 grade have declined sharply since then. Therefore, SteelOrbis’ reference price for ex-Baltic HMS I/II 80:20 scrap has only dropped by $2/mt since yesterday.
Market sources report that an ex-EU scrap deal has been done by a Turkish mill for HMS I/II 80:20 scrap at $329-329.5/mt CFR, for February shipment. While this information was not confirmed by the time of publication, the price level is considered to be acceptable by several players who also admit that bids coming from Turkish mills are even lower than this level.
SteelOrbis also hears that an ex-Baltic seller is in the market asking for $340/mt CFR for HMS I/II 80:20 scrap, but market sources report that this level is too high at present. A cargo from the EU is offered at $337/mt CFR for the same grade, with the price again found to be on the high side. A source at a major Turkish producer said these offers “obviously” have room for negotiation. “Having said that, we should be close to the bottom. Levels lower than the recently confirmed levels, even with the downward pressure resulting from the high number of offers, are disruptive for the rebar market,” the same source commented. A seller of ex-US and ex-EU scrap commented that the abovementioned prices are not workable right now, “Those offers are high for ex-EU HMS I/II 80:20 scrap. The workable price is likely to remain at $325-330/mt CFR.” As SteelOrbis reported today, a German steel producer is currently paying €275/mt delivered for HMS I/II 80:20. Local scrap prices in the German market at the beginning of January seem to be moving up slightly, though some sources claim prices have been stable compared to December. However, any upticks in prices are not due to better demand. A German sub-collector said domestic scrap prices are likely to remain stable for higher grades as compared to last month. Another source commented that, even with the upward revisions announced by some European mills last week, prices are unlikely to indicate an overall rise. Sentiment in Turkey’s billet import market has become a little more negative, mainly due to concerns regarding the longs export segment, sliding scrap prices and the difference between lead times for billet from Asia and for deep sea scrap. In the meantime, despite some attempts by the Chinese to raise prices, the general import offer range for Chinese billet to Turkey has decreased over the past week by $5/mt to $450-475/mt FOB depending on the origin. Regarding the local rebar market, Turkish mills are trying to get ready for a demand recovery, probably to be seen in the second half of February. “With the weather getting better in March and April, construction will restart in Turkey. Hence, the restocking activity of rebar traders is expected to have a positive impact in the second half of February. The end of the Syrian war and the reconstruction plans in Turkey’s earthquake-hit region do carry significant weight in our positive expectations,” another source stated.
Additionally, market sources report that there is also a high number of short sea offers. A source at one mill stated, “There are plenty of offers for short sea scrap.” A Romanian cargo is offered at $327/mt CFR Turkey for HMS I/II 80:20 scrap, but found not to be workable. Buyers say their price idea for this grade is closer to $315/mt CFR. Another source reports that Romanian sellers are finding it difficult to lower their prices due to their higher collection prices, “These offers shared right now are from the sellers that have already booked their vessels, and the price does not fit for Turkish buyers.” A Greek cargo is offered at $335/mt CFR, for HMS I/II 80:20. An Italian cargo consisting of bonus scrap is offered at $355/mt CFR. A short sea scrap seller said he believes these prices cannot be accepted right now.