While there are no fresh deals disclosed to the market in the current week, the estimations for deep sea scrap prices in Turkey have moved further down. The sentiment in the market is still negative as Turkish mills have not been successful in selling finished steel either in the local market or abroad. Particularly, in the short sea segment, sellers continue to panic and have been cutting their prices more rapidly. The low billet prices received from Russia are taking their toll on the scrap market, although the offer range is not solid and the offers vary depending on the seller. At the end of last week some traders were offering at $750/mt CFR at the lowest, while this week prices down to $730-740/mt CFR have already been heard. The average freight is estimated at $50/mt minimum. Some sources have said over 200,000 mt of billet has been traded to Turkey recently, but many market players doubt such a large volume could have been, given the risks of working with Russia and the constantly falling prices. The silence in the local rebar market is not helping, though some players believe that demand may recover after Ramadan.
Currently, the expectations for ex-EU HMS I/II 80:20 scrap are at around $620-625/mt CFR, while ex-US HMS I/II 80:20 scrap quotations are believed to be around $630-635/mt CFR. The collection prices of sellers barely cover the voiced levels, SteelOrbis understands. “Some sellers are ready to sell at around $620-625/mt CFR, though buyers’ price ideas for European scrap is much lower,” one seller commented. Meanwhile, a source from a Turkish mill stated that the main problem is Turkey’s lack of finished steel sales, while he added that scrap sellers are resisting the pressure as they need to see a signal before selling any cargoes. “This is not a time when the seller can sell and then collect. No one wants to lose money,” the source explained. SteelOrbis also hears that Turkish mills are targeting prices closer to $600s/mt CFR for deep sea HMS I/II 80:20 scrap, and some mills are willing to wait longer. A gradual decrease in prices is possible in the coming period, but several players think it unlikely that prices will decrease lower than $600/mt CFR in one move.
In the short sea segment, HMS I/II 80:20 scrap from Romania has decreased to $555-559/mt CFR in the current week. “There is panic among short sea sellers, particularly those that have material in hand. The lack of a signal for deep sea scrap deals is not helping,” a seller commented. Meanwhile, some producers report receiving offers at $550s/mt CFR for Romania origin HMS I/II 80:20. For the Mediterranean region, producers’ workable levels for ex-Israel HMS I/II 75:25 scrap prices are at $520-530/mt CIF Iskenderun, but no deals have been closed in this range yet. According to a seller, “Everyone in the short sea segment will decide depending on their own positions, whether to sell at lower levels or not will be the supplier’s choice.” It can be observed that the correlation between short and deep sea scrap prices have been disrupted once again, and this is believed to have been caused by the silence in the deep sea segment.
In addition to low-priced Russian billet, traders in the local market are also reducing their rebar prices. “The pressure on the spot market is rising. Every day we are hearing of another fall in traders’ rebar quotations,” a source commented. The gap between the spot market and mills’ prices has widened, with producers not following the downtrend at a similar pace. “Producers also need to see the new level fixed in a deep sea deal, while their production costs have also increased, so I doubt anyone can reduce their prices to traders’ current levels in the short term,” a mill commented. While Turkey’s construction industry is performing poorly as compared to initial expectations, some market players think that there is delayed demand and we may see a recovery after Ramadan. “We will not forget that the main market for Turkish long steel is the local market and we need to sell domestically to say things are getting better,” a long steel producer commented.
