Scrap offer prices to Turkey have continued to increase this week, with sellers maintaining their pricing power due to the approaching holiday season and the upward trend observed in freight rates. SteelOrbis hears that higher freight rates are causing postponements of shipments of previous deals, potentially creating a need for prompt shipments. However, several market sources report that there are not many offers available to fill potential gaps in shipments.
Late last week, an ex-UK deal was reported to have been closed by a Marmara-based producer with HMS I/II 80:20 scrap standing at $413/mt CFR and shredded scrap at $438/mt CFR. This means ex-EU scrap prices increased by $6.75/mt week on week, though market players believe that the next European scrap deal will be closed at higher levels.
Currently, ex-US scrap offers are around $430s/mt CFR, increasing by $5/mt just today. The scrap flow to yards has been disrupted. Iron ore and coal prices are still supporting the scrap segment. First expectations regarding the local steel and scrap markets are positive. Turkey needs at least 15 deep sea cargoes to be shipped in January. A source at a Turkish producer said, “Deals for January shipments are close. Prices probably will not see a downward correction.” Another source at another mill commented, “Unless all Turkish mills take a step back, longs and flat steel producers, deep sea prices will move up.” A supplier of ex-US and ex-EU scrap pointed to the holidays starting on December 20, followed by the Orthodox New Year. Having said that, all players in the market say that the current sharp uptrend of scrap prices carries a big risk and threatens the sustainability of prices.
An ex-Bulgaria cargo was bought by a Marmara-based producer at $398/mt CFR for 3,500 mt of HMS I/II 80:20. A short sea scrap seller said that, for Romanian HMS I/II 80:20 scrap, workable levels are now above $400/mt CFR. Ex-Adriatic scrap offers to Turkey remain in the range of $405-410/mt CFR.
