Relatively new ex-US and ex-EU deals from late last week are disclosed to the market today, June 26, just ahead of the Feast of Sacrifice holiday in Turkey to start tomorrow afternoon to end on Monday, July 3. Transactions in question show that price gap between ex-US and ex-EU HMS I/II 80:20 scrap has narrowed below the traditional $5/mt as previously anticipated by SteelOrbis.
A Marmara based producer has concluded the ex-US deal, reportedly on Friday (June 23), HMS I/II 80:20 scrap at $380/mt CFR, shredded and bonus grade scrap at $400/mt CFR. Half of the cargo’s tonnage is HMS I/II 80:20 scrap, SteelOrbis has learned. This level is $3.5/mt lower than SteelOrbis’ estimations for this grade.
An ex-EU scrap deal is done by an Iskenderun-based mill with HMS I/II 80:20 scrap standing at $378/mt CFR. This deal was also done late last week, Thursday or Friday, details not confirmed at the time of publication. This price level is $1/mt lower than the previous price range for ex-EU HMS I/II 80:20 scrap.
Turkey’s need for deep sea cargoes to be shipped in July is mainly satisfied by previous deals, hence Turkish mills are in no rush to buy new ones. However, it should be reminded that they will start buying for August shipments after the holiday and this demand may support deep sea scrap quotations. “Turkey has not bought much for August yet, and mills will be forced to return to the market to buy scrap. Depending on the finished steel demand they receive, they may act quicker. The new interest rate and the depreciation of the Turkish lira seems to trigger some demand from rebar traders,” a source said. A trader seconded the idea, adding that “After the Turkey’s Central Bank’s interest rate announcement, I observed a lively demand in the local rebar market. I believe approximately 100,000 mt of rebar might have changed hands from producers to traders.” Market players mostly believe that there is not much room for scrap suppliers to cut their prices further. A Baltic scrap supplier believes that “market is set to remain stable during the holiday, I do not expect much trading. We should observe what US-based sellers will do. If they keep their prices firm, we can say this is the bottom”. Meanwhile, signals coming out of China are still negative, long steel prices falling by $20/mt over the week. Production of steel is still high in China and with the rainy weather there is no other option than gradually decreasing prices. Therefore, exports are expected to continue. Turkey still has almost no chance to export finished steel and is mainly dependent on domestic steel demand. Most recent billet deals in Turkey were done from Russia/Donbass at $530-540/mt CFR, a trader targets to sell Russian billet to Turkey at $555-560/mt CFR. On the other side, Asian billet offers disappeared from Turkish market since Asian traders have already sold their positions to non-Turkish regions.