Another deep sea scrap booking has been disclosed in the Turkish market, this time from the Baltic region. The deal has been done in line with the anticipated trend, following the price decline recorded in the latest transaction reported by SteelOrbis earlier today, which was concluded from Belgium.
A Turkish steel producer, based in the Marmara region, has agreed to pay a Swedish scrap supplier $340.5/mt CFR for HMS I/II 80:20 and $360.5/mt CFR for shredded and bonus scrap. The cargo is to be shipped in June. Previously, following the Belgian sale at the estimated level of $336.5/mt CFR for HMS I/II 80:20, the evaluation for Baltic cargoes had stood at $339/mt CFR minimum for the same grade. In fact, the quality of Swedish scrap is considered to be high and so market sources believe that the deal price is in line with the current market trend. The previous deal from the same Baltic region-based supplier was reported over 10 days ago at $346.5/mt CFR for HMS I/II 80:20.
Scrap supply to the Turkish market is currently on the high side, strengthening the positions of buyers, and so the downward pressure on prices may increase. In addition, although Turkish mills are expected to continue scrap bookings in the coming period, they seem to be leaning towards exerting more control over their margins by buying import billet. While their own production costs for square billet from scrap are estimated roughly at $490-495/mt, the latest billet offers from China were at $455-460/mt CFR at the end of last week. “Even though it [Chinese billet] is for arrival in September, if a mill is a continuous buyer, then the risk is less. And it is very unlikely that in September rebar prices will go below $500/mt. Mills will keep their production under control,” a market source told SteelOrbis.