Turkey’s latest scrap purchase from the US West Coast has been closed at a significantly lower price level, raising questions of whether this would increase the downward pressure on deep sea scrap prices. It was already observed that Turkish mills were resisting previous levels, though sellers were also standing firm, keeping their offer price levels relatively stable. However, another scrap booking from the US, this time from the East Coast, has been shared with market intermediaries, with the deal done at a stable price, easing any uncertainties regarding the market trend.
SteelOrbis has learned that the ex-US West Coast deal was done by an Izmir-based steel producer with HMS I/II 90:10 scrap standing at $374/mt CFR and bonus grade scrap at $394/mt CFR. This deal was not done with a traditional supplier to Turkey and so the HMS I/II 80:20 scrap price declined to $370-371/mt CFR Turkey, down $4-5/mt compared to the previous ex-US East Coast bookings. Accordingly, the price in the deal is not considered to be indicative for scrap from the US East Coast - the usual source of ex-US scrap supplies to Turkey.
Another ex-US East Coast booking was closed by a Marmara-based Turkish steel producer today, January 21, with HMS I/II 90:10 scrap at $381/mt CFR, and shredded and bonus grades at $396/mt CFR. Given the usual $20/mt gap between shredded and HMS I/II 80:20 grades, the price of the latter is still at $376/mt CFR, and so SteelOrbis has kept its reference price for ex-US scrap stable.
There are not many offers shared by the EU-based suppliers, SteelOrbis hears. While more than three Turkish producers are seeking cargoes for February shipment, only two ex-EU scrap cargoes are available this week. Both sellers tried to achieve a deal with the HMS I/II 80:20 scrap price at $375/mt CFR, though the bids shared were lower than $370/mt CFR. More than one source mentioned that Egypt is also currently an option for scrap sellers as demand there is also recovering supported by a sea freight rate advantage. A German sub-collector stated that they have sold a large part of their inventory to an exporter at €280/mt DAP, reporting that the higher end of the €275-285/mt DAP collection price range is disappearing. “There are not many exporters paying €280/mt and higher left in the market. We hear another €5/mt decline may be seen at export yards. Local EU-based mills are also failing to compete with exports currently. A small decline can also help them [EU-based producers] too,” he reported. It is clear that Turkish mills will try to exert pressure on deep sea scrap prices in the coming period. How much of a decline they can achieve depends on the stance of sellers. “If sellers panic and the number of offers shared with Turkey increases, there is potential for a small decline in prices,” a seller said. Another supplier commented, “It doesn’t always work out well without fundamental support [such as steel demand].”