Several deep sea scrap transactions were heard late yesterday, September 28, with some turning out to be right and indicated diverse price trends.
SteelOrbis has learned that a Black Sea-based steelmaker has concluded an ex-Finland deal for 15,000 mt of HMS I/II 80:20 scrap at $442/mt CFR, 16,000 mt of shredded scrap at $457/mt CFR and 4,000 mt of bonus grade scrap at $457/mt CFR. The cargo will be shipped in the first half of November. In the previous bookings from the Baltic region HMS I/II 80:20 scrap were priced at $433-434/mt CFR Turkey. Considering the scrap quality of this supplier, a slightly higher price was considered not surprising.
Meanwhile, another ex-Baltic transaction by an Iskenderun-based producer has been done for HMS I/II 80:20 scrap at $433/mt CFR and bonus grade scrap at $448/mt CFR, for October shipment..
On the other hand, an ex-Netherlands cargo is rumored to be bought by a Marmara-based producer with HMS I/II 80:20 scrap and bonus grade scrap at $425/mt CFR and $440/mt CFR, respectively. Previous to this deal, SteelOrbis’ estimations for European HMS I/II 80:20 scrap were 426-433/mt CFR.
Additionally, an old ex-Venezuelan deal was disclosed to the market for 25,000 mt of HMS I/II 80:20 bought by an Izmir-based mill at $434/mt CFR, but eight days ago. The previous ex-Venezuelan cargo was closed at $436.5/mt CFR in mid-September.
It is observed that there are mixed feelings about the possible future trend of the market. A source from producers’ side states that, despite the problems faced on the rebar side, scrap prices are close to the bottom and with the approaching winter and the traditional tendency of Turkish mills to raise their inventory levels ahead of Christmas may change the landscape with a little help from the iron ore segment. On the other hand, some market players believe that the pessimist sentiment will not change until Turkey successfully makes some export sales. Some players state that the energy cuts announced by China, leading to a production halt in some cases, can create opportunities for Turkey and Russia in the region. The energy shortage voiced in the international market is leading to a spike in prices and some sources believe a 40 percent rise in energy costs will cause six percent rise in production costs for EAFs, both in the EU and Turkey. Having said that the sentiment in the European scrap market is improving, player state that their expectations of a €20-30/mt decrease in October has changed as demand from mills revived, hence a stable to €10/mt decrease in local prices seem more likely under the current circumstances.
Following the Turkish Central Bank’s decision to cut interest rates, Turkish lira is fluctuating against the major currencies with a depreciating trend. This is creating uncertainties not just for scrap buyers but also for all segments, particularly local rebar market. Traders state that they are receiving a slight demand from construction sites but buyers are cautious. Hence, domestic rebar prices are expected to tick down further in the coming week.