Following a silent week, an ex-US scrap deal has been disclosed to the import market in Turkey with lower prices for benchmark HMS I/II 80:20 scrap.
SteelOrbis has learned that a Marmara-based producer has bought the cargo for HMS I/II 80:20 scrap at $502/mt CFR and shredded scrap at $512/mt CFR. With the most recent ex-Belgium scrap booking closed at $510/mt CFR Turkey for HMS I/II 80:20 scrap, SteelOrbis’ estimation for the same grade from the US was at $515-520/mt CFR.
As Turkish mills have concluded higher-than-average-priced deep sea bookings for June in terms of numbers, they have taken a step back and started to exert pressure on prices. Some market players state that Turkey has more room to wait, and maybe can stay out of the market next week. As reported by SteelOrbis, US suppliers were also not offering to Turkey for some time, and so the abovementioned deal is indicative. However, US suppliers state that they have sold some cargoes to alternative destinations, particularly cargoes consisting of shredded and bonus grades. Although they admit HMS I/II 80:20 scrap is meant for Turkey, they state the flow to export yards is slow. The situation is similar in the EU, other sources state, adding that European suppliers have sold a lot in this round of sales to Turkey due to the high price levels. With the US scrap prices decreasing to $502/mt CFR Turkey, Baltic origin HMS I/II 80:20 scrap quotations are estimated to be in the range of $495-502/mt CFR, while predictions for European scrap prices have moved down accordingly to $490-495/mt CFR Turkey.
The short sea segment has also been quiet in term of new transactions in the current week, though the mood is more pessimistic, according to sources. One mill has stated that some short sea sellers have waited a lot due to their expectations of higher prices, but with the mood changing on the deep sea side now sellers are panicking and offering aggressive prices to Turkish mills. Market players believe that the workable levels for HMS I/II 80:20 scrap from Romania and Adriatic are at around $475-480/mt CFR Turkey.
Meanwhile, the stimulus packages in the US and the EU are supporting the international steel market, softening the impact of the situation in China. Goldman Sachs said it no longer sees China as the center of commodities pricing, pointing instead to the pace of demand recovery in developed markets. Having said that, SteelOrbis thinks that all players will continue to monitor the impact of China’s long-term policies on its steel market and the impact of infrastructure projects on global prices.
