Turkey has started to buy scrap for September shipment, though Turkish mills are resisting higher price levels due to their concerns regarding steel demand, the ongoing turmoil in the Middle East, and the lack of workable profits.
SteelOrbis has learned that a Marmara-based steel producer has concluded an ex-US booking with HMS I/II 80:20 scrap at $375/mt CFR, which was the level targeted by Turkish mills for this grade. Another older deal from the US was also closed at this price level by an Izmir-based producer. SteelOrbis' reference price for ex-US scrap currently stands at $375-376/mt CFR.
An ex-France deal was closed at $371/mt CFR Turkey late last week, while another ex-UK booking of a prompt cargo is reported to have been signed at $371/mt CFR. However, this ex-UK booking was denied by the parties supposed to be involved in the deal, while the price was found to be high by several market players, though the quick shipment may be the reason. SteelOrbis' reference price for ex-UK/EU scrap now stands at $368-371/mt CFR, moving up by $1/mt on the upper end.
Market sources report that there were some scrap cargoes available for August shipment, which have now been postponed to September, and so some softer price levels may be achieved for these materials. Meanwhile, local US scrap market negotiations have started amid downward pressure, though collection prices at US East Coast ports have increased this week. On the EU side, collection prices have hit €275/mt DAP once again, while the holiday season causes flow to yards to remain slow. The European domestic scrap market is believed to have completed its downward movement for now. With the possibility of a peace agreement between the US and Iran, a positive outcome could cause a slight downward correction, sources believe. Developments in this regard are being monitored closely. For now, except for prompt shipments, it is believed that deep sea scrap prices will remain firm and may have some small room to move up depending on rebar demand in Turkey. Some sources believe that rebar demand may revive a little during September. Sources report that import billet prices offer little support to Turkish mills for the time being, with one source noting. “Using scrap makes more sense considering the current billet prices to Turkey.” At the start of August, Turkish mills are testing higher local rebar prices due to the ongoing currency fluctuations and high production costs. However, most local buyers are in wait-and-see mode given the current high interest rates for bank loans.
