Several new deals have been disclosed in Turkey’s import scrap market today, March 31, with prices lower than the previously estimated levels for ex-US and ex-Baltic HMS I/II 80:20 scrap. “In theory, the scrap price in Turkey should not move down, but Turkish mills are still trying to keep it from rising further,” one market player said, reflecting the widespread view of the current situation.
SteelOrbis has learned that a Marmara-based mill has concluded a deal for a total of 38,000 mt of scrap from St. Petersburg. The cargo will be shipped in late May and consists of 23,500 mt of HMS I/II 80:20 scrap, 8,000 mt of bonus grade scrap, 3,500 mt of busheling scrap and 3,000 mt of shredded scrap. The HMS I/II 80:20 scrap price is at $648/mt CFR. Prior to this deal, SteelOrbis’ estimation for this origin HMS I/II 80:20 scrap was in the range of $645-650/mt CFR and at $647.5/mt CFR on average.
Also, the same Turkish producer has bought an ex-US cargo with HMS I/II 80:20 scrap at $653/mt CFR, shredded scrap at $683/mt CFR and bonus grade scrap at $683/mt CFR, for April shipment. Accordingly, the gap between prices for HMS I/II 80:20 and higher grades is $30/mt. Prior to this deal, SteelOrbis’ estimation for the ex-US benchmark HMS I/II 80:20 scrap was at $657.5/mt CFR on average. On the other hand, this ex-US HMS I/II 80:20 scrap price at $653/mt CFR is $8/mt higher than the level recorded in the previous deal.
Meanwhile, another ex-EU scrap deal is rumored to have been done at $650/mt CFR Iskenderun, but this information has been rejected by the buyer. Some market players believe that this level is the average price and that there are special payment conditions. Since the deal has not been confirmed by the buyer or the seller, it is not accepted as an indication for European origin HMS I/II 80:20 scrap. SteelOrbis’ ex-EU benchmark price will continue to stand at $643/mt CFR Turkey.
According to a seller, “Turkish mills have started to meet the finished steel demand received when prices were much lower and, as they gradually sold material starting from the $850-860/mt FOB range to $950-960/mt FOB, we can see that their average price is not so high.” As a result, Turkish steelmakers are trying to evaluate the situation and to exert pressure on scrap prices. There is unwillingness on the sellers’ side to cut prices though. “If sellers do not panic, deep sea scrap prices are set to move up when Turkish mills return to the market in full strength,” a source commented. Meanwhile, Turkey’s bookings already made for May shipments are estimated at around five to seven, which means there is still some way to go in terms of completing bookings for May shipments. The disruptions in the short sea segment, particularly observed on the Black Sea side, will also cause mills to focus on deep sea scrap sources.
Some short sea scrap bookings have been done by Turkish mills this week, with Romanian HMS I/II 80:20 scrap prices standing at $618-619-620/mt CFR. Also, an ex-Lebanon deal was closed at $615/mt CFR for HMS I/II 80:20 scrap. A short sea scrap supplier stated that the €290/mt scrap export duty announced by Russia due to take effect on May 1 has not impacted the market much, since at the previous €100/mt rate ex-Russia scrap flow was already very slow. “We can say that short sea scrap supply has shrunk by 80 percent,” the source commented. Meanwhile, another supplier commented that tonnages from Italy and France were higher than usual in March and compensated for the lack of short sea scrap or balanced the gaps in Turkish mills’ inventories. Ex-Israel HMS I/II 75:25 scrap is sold to Turkey at $598/mt CIF Iskenderun and $605/mt CIF Marmara.
At last, the news regarding Venezuelan scrap is not positive. While some cargoes were canceled amid the strict investigations conducted by the government and some shipments were delayed. Having said that, the future for Venezuelan scrap exports does not look good. Turkey imported 107,277 mt of scrap from Venezuela in January this year and a total of 936,151 mt over the course of 2021.