Ex-US scrap price in Turkey declines to $330/mt CFR

Tuesday, 28 June 2022 17:29:16 (GMT+3)   |   Istanbul
       

As anticipated by SteelOrbis, ex-US scrap prices has declined following the sharp decrease observed in the latest ex-EU deal fixed at $315/mt CFR for HMS I/II 80:20. However, sellers have started to show some resistance to the falling prices, with most European sellers commenting that they cannot accept such levels anymore. A flat steel producer in Turkey also stated, “Although we would like our costs to move down as producers, even we would be happy to see a bit of stabilization or an increase in scrap prices under the current stagnant demand situation in Turkey.”

SteelOrbis has learned that a Marmara-based mill concluded the ex-US deal for 13,000 mt of HMS I/II 80:20 scrap at $330/mt CFR, 15,000 mt of shredded scrap at $345/mt CFR and 3,000 mt of bonus grade scrap at $345/mt CFR. The deal was done on June 27, for July shipment. Prior to this transaction, SteelOrbis’ daily prices for the US origin HMS I/II 80:20 scrap were in the range of $330-335/mt CFR. A SteelOrbis source commented that the level recorded in this booking is “surprising, this deal may have the aim of reducing the average cost of the previous ex-US scrap deals.”

Meanwhile, a second cargo from a European supplier has been sold to China. The first deal from the EU to China was disclosed last week, done by the same seller, while the details were not shared. However, some market players state that the cargoes include bonus and shredded grades and amount to 50,000 mt each. The prices in the bookings have not been shared yet, though SteelOrbis hears that they have been done at more attractive levels as compared to Turkish mills’ desired levels. “These new destinations and buyers surfacing in the market in the absence of Turkey are here to stay, and will be direct competition for Turkey when it returns to the market for good,” a seller said.

“I think this [ex-US] deal [abovementioned] may stand out as a radical one in the coming days,” a supplier commented, adding “Most sellers in the EU think that this level is the bottom, not mentioning the US-based sellers.” Another supplier stated that some Europe and Baltic-based suppliers have received bids from Turkey at around $330/mt CFR, but decided not to accept them. The workable levels are considered to be in the range of $335-340/mt CFR for the coming round of bookings. “If there is a supplier that has waited too much, it is possible even now to see another decrease in prices, but this does not mean that everyone is ready to reduce their quotations for Turkey,” another supplier reported. Another supplier added, “There are not many deals done for July by Turkish mills, maybe nine or ten in total. This means, if they are not stopping production, they need to buy at least 15 more for July shipment, and they should buy them quickly. A $20-30/mt recovery in deep sea scrap prices is possible since the recent fall was caused mainly by stressed cargoes.” A Marmara-based mill’s 50,000 mt rebar sale to Hong Kong at $670/mt CFR or $625/mt FOB is having a positive impact on the scrap market, SteelOrbis observes.

The new regulation regarding limitations for lira-based loans for firms holding foreign currency announced by Turkey’s Banking Regulation and Supervision Agency on Friday, June 24, is also impacting finances. “There are still some uncertainties that we need to resolve about the new ruling,” one producer commented. Another SteelOrbis source said that the details of the ruling signal that Turkish mills will not be affected much by the new regulation.

In the short sea segment, the mood is more positive as compared to the end of last week. There are several ex-Romania deals done in the range of $308-309/mt CFR Izmir. The total tonnage is approximately 10,000 mt. “Sellers will try for $310/mt CFR and above for the coming round of sales. they are in no rush to sell at the lower levels,” a short sea scrap supplier commented. For ex-Israel HMS I/II 75:25 scrap, mills’ bids are in the range of $270-285/mt CIF, though sellers’ ideas of a workable price are currently at $300/mt CIF.


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