Turkish steel producers are waiting to see finished steel demand revive before they decide how to proceed with their scrap purchasing activities.
During the Ramadan period, exporting activities on the finished steel side were quiet in Turkey, which consequently led Turkish producers to act cautiously as regards scrap purchases. Returning from the end-of-Ramadan holidays, Turkish producers are expecting demand for finished steel from Egypt and the Persian Gulf region to strengthen, though the anticipated improvement in demand has not been seen yet. In this context, Turkish producers seem to prefer to delay their new scrap purchases as much as they can until the picture becomes clearer.
As the US domestic market was strong back in August and as prices increased by early September, Turkish producers preferred to book scrap ex-Europe rather than from the US. In recent weeks, ex-US bookings were concluded at $400/mt CFR for HMS I/II and at $405/mt CFR for shredded. While US scrap offers even surpassed these levels in recent weeks, they were not accepted by the Turkish producers. This week HMS I/II 80/20 offers ex-US have maintained their $400/mt CFR levels, while acceptable price levels for Turkish producers remain at $390-395/mt CFR.
Last week a deal for a HMS I/II 70/30 scrap cargo ex-Europe was concluded at $386/mt CFR. This week HMS I/II 80/20 offers are heard to be at around $395/mt CFR.
A3 grade scrap ex-Black sea is offered in the range of $395-398/mt CFR. However, Turkish producers' acceptable price level today is not above $390/mt CFR.
As of now, Turkish steel producers seem to prefer to hold back new scrap bookings until they see a sign of revival on the finished steel side. On the other hand, however, this delay in booking may not last long as no cargoes for October have been purchased so far.