US-based scrap suppliers have been offering cargoes to Turkey for a week now, and a new deal from the US supports the idea that Turkey’s import scrap market is set to move down.
SteelOrbis has learned that the deal in question was done yesterday, September 6, for HMS I/II 80:20 scrap at $373/mt CFR and shredded scrap at $393/mt CFR. Some players state that the price levels were instead at $375/mt CFR and $395/mt CFR, in the same respective order. The deal was not confirmed by the time of publication, but is largely known by market players to have been done. Prior to this deal, the ex-US HMS I/II 80:20 scrap price was at $382-387/mt CFR, an estimation made according to the ex-EU deal announced yesterday.
There is also another rumour of an ex-EU deal closed at around $372/mt CFR for HMS I/II 80:20 scrap. Some market players report that the cargo consists of 25,000 mt of HMS I/II 80:20 scrap, 7,500 mt of P&S scrap and 7,500 mt of shredded scrap at the average price level of $380/mt CFR. However, this deal is believed to have been closed at the beginning of the week and this level is considered unworkable by mills right now. Considering the abovementioned ex-US scrap booking, ex-EU HMS I/II 80:20 scrap prices are expected to decline to $360-365/mt CFR.
Turkish mills have also started to cut their production rates, as anticipated by SteelOrbis. “Under the current situation, we believe there is no rush to buy scrap right now,” a Turkish steelmaker commented. Turkish mills indicate there is also an additional cost when they decide to lower production rates, but right now the demand structure is seriously broken in Turkey. “We are also not expecting a demand recovery from abroad, since there are competitors from Southeast Asia as heard over the past weeks. They are selling lower-priced billets to the EU,” the steel producer commented. Turkey is targeting $350s/mt CFR for premium deep sea scrap, and the bottom level of prices is hard to estimate before some trading recovery is seen on the steel side. Some Turkish mills already reduced their rebar prices to $680-685/mt ex-works, and even for such price levels demand is on the low side. An ex-Baltic scrap seller stated that they are in no position to accept the lower bids of Turkish mills, though the US may accept them. Local US scrap prices are also expected to decline when trading begins for September.
In the short sea segment, two ex-Romania deals have been done, both to the Marmara region. One of the deals was for 1,700 mt of HMS I/II 80:20 scrap at $356/mt CFR. The tonnage in the other deal has not been disclosed. There is a rumour of an ex-Romania deal for the same grade closed at $354/mt CFR Marmara, but this information was not confirmed by the time of publication. The downtrend of prices is expected to continue.