Import scrap prices from the US have indicated a sharp decrease in the latest deal disclosed to the import market in Turkey today, August 20.
SteelOrbis has learned that an Iskenderun-based mill has concluded an ex-US scrap booking for 20,000 mt of HMS I/II 80:20 scrap at $450/mt CFR, 7,000 mt of shredded scrap at $470/mt CFR and 3,000 mt of bonus grade scrap at $470/mt CFR, for September shipment. The previous ex-US deal was closed at $461/mt for benchmark HMS I/II 80:20 scrap on August 8, but the estimations for the material were in the range of $455-460/mt CFR following the ex-EU deals closed this week at $443-445/mt CFR.
Turkey’s import scrap market was waiting for an ex-US scrap deal to give a signal on prices and this deal indicates that the decreasing trend has not come to a halt. While there are diverse expectations in the market, now with this latest US scrap booking, it is safe to say that ex-Baltic cargoes will probably be closed in the range of $445-450/mt CFR in the coming days. On the other hand, since the price of European scrap has fallen in the first half of the current week, SteelOrbis estimates it will remain at around $443/mt CFR for now.
While some market players - particularly the sellers on the European continent - state that collection prices do not cover the current price levels that Turkish mills are seeking and so they are staying out of the market for now. Some European sellers have mentioned that their price expectations for their domestic market, especially for higher grades, is good. A German supplier stated that the current procurement prices in their region for higher grades are in the range of €380-390/mt which is almost equal to $472-475/mt CFR Turkey with freight rates considered at $24-26/mt. This level is certainly considered unworkable by Turkish steelmakers now. Meanwhile, another supplier stated that their expectations are not so great for the coming period, and, with global iron ore prices falling sharply, deep sea scrap quotations have room to decline further. However, a major European supplier stated that the correlation between iron ore and scrap has been disrupted and so it is not possible to make an educated guess for the future trend of scrap at the moment. Additionally, the material bought from Venezuela and Libya is attracting more attention each day. “Demand in the alternative markets such as Mexico, Latin America and Egypt is also silent against the backdrop of this downtrend in Turkey,” one source reported.
In the short sea segment, demand is still sluggish, though some deals have been closed from Romania and the Adriatic region for HMS I/II 80:20 scrap at around $420/mt CFR Turkey. Market players state that the bids of Turkish mills for ex-Israeli HMS I/II 75:25 scrap are at around $390/mt CIF Iskenderun, though sellers are resisting this levels and so no sales has been concluded. Having said that, following the ex-US scrap transaction abovementioned, current levels are not expected to hold next week.
According to market players, at least 100,000-120,000 mt of finished steel has changed hands in Turkey over the current week. While this number is not bad, the expectations for the future trend of the local Turkish rebar market are negative amid the lack of exports. The September order books of Turkish long steel producers are full, but the traditional construction season is close to its end. Most players in the rebar spot market anticipate prices will decrease further in the coming period, which will also put pressure on scrap quotations if mills do not sacrifice their high margins.
