The mood in Turkey’s import scrap market has changed, as SteelOrbis has observed. While there have been very many rumors in the market about new deals in the current week, some of them are known to have been concluded last week, while others have just been rumors without any tangible reality.
An ex-Baltic deal done by a Marmara-based Turkish producer last week has been disclosed to the market today, January 13, with the HMS I/II 80:20 scrap price standing at $478/mt CFR and shredded plus bonus grade at $488/mt CFR. This deal was done before the ex-US deal done to Turkey’s Marmara region at $481/mt CFR which was disclosed to the market on January 8. SteelOrbis’ estimation for the ex-Baltic benchmark HMS I/II 80:20 scrap price is currently in the range of $478-480/mt CFR.
According to market sources, there are several sellers from various locations such as the Baltic region, the US and the EU in the import scrap market in Turkey, seeking opportunities to conclude deals. SteelOrbis has learned that most of these offers are for March shipment, though there are a few for February shipment. Against the backdrop of an apparent increase in supply, Turkish mills have started to anticipate a correction in import scrap quotations. They are taking their time before responding to several offers, trying to build up pressure on quotations as their need for cargoes to be shipped in February is now lower following the transactions they concluded since the beginning of January. On the other hand, they still need a lot of cargoes for March shipments. According to some sources, this strategy of the Turkish mills may give a breather to the market and result in a kind of stability which may be healthy for the market.
Some players have interpreted the Turkish mill’s current expectations as being psychological rather than being more solidly based, pointing to the drivers of prices such as the Covid-19 lockdowns, winter conditions, the new higher export duty on Russian scrap exports and the high collection costs. Also, although Chinese buyers have started scrap imports of relatively small tonnages from Japan, once the international scrap price becomes more attractive they may accelerate imports, even from other than Asian markets, some sources have stated. The spread of the Covid-19 virus in China has created some concerns, but the country has initiated strict measures once again which were the key to its previous success against the virus. Also, Turkey’s recent sales to the Far East are considered to be supportive for the scrap market. As regards Russia, market players state that collection costs there have risen rapidly as sellers are trying to complete customs procedures for their previous bookings before the new duty takes effect on February 1. For the coming period, the general view is that supply from Russia will decrease somewhat but the extent of the decrease remains to be seen. In addition to all these factors, a major European seller has stated that demand has been received from other buyer regions, such as Egypt and the Indian subcontinent. As SteelOrbis reported before, Egyptian Steel has opened two international scrap tenders, each for 40,000 mt, with February 5 and 10 set as loading dates.