While Turkish mills continue to close ex-US scrap bookings, prices have remained stable. Suppliers are keeping their offers to Turkey firm, with some even aiming for higher levels in the coming period. However, Turkish mills’ finished steel sales are on the low side and the question is whether they will support another rise in the scrap market or not.
SteelOrbis has learned that an Iskenderun-based producer concluded a deal from the US last week, with the cargo only consisting of shredded and bonus grades of scrap at $428/mt CFR. The total tonnage is believed to be 30,000 mt. The deal indicates that the HMS I/II 80:20 scrap price is at $408/mt CFR, very close to the deal reported by SteelOrbis yesterday, January 23.
A second ex-US deal was done by a steelmaker in the Marmara region. The cargo consists of 16,000 mt of HMS I/II 85:15 scrap at $411/mt CFR, 11,000 mt of shredded scrap $430/mt CFR and 3,000 mt of bonus grade scrap $430/mt CFR. The cargo will be shipped in late February. Taking the price of the higher grades into consideration, the benchmark HMS I/II 80:20 scrap price is calculated to be $410/mt CFR.
Another ex-US transaction was closed by the same Marmara-based producer for HMS I/II 80:20 at $410-411/mt CFR, while bonus grade and shredded scrap in the cargo were priced at $430-431/mt CFR.
Amid rising local procurement scrap prices in the European region, market players state that the domestic market is as attractive the export market. “I do not think that lower prices from export yards would increase the interest of sub-collectors since domestic scrap quotations are rising. I think [domestic scrap] market will hold its levels if not rise in February, and so we are in no rush to sell our inventories in hand,” a sub-collector in Germany commented. SteelOrbis hears that the collection activity in the EU has not recovered much. A market intermediary reports that collecting material for lower-priced scrap deals is becoming hard. Under the current circumstances, European scrap is aiming towards $405/mt CFR and above. A major EU-based scrap supplier said he believed that the benchmark HMS I/II 80:20 scrap will reach $410s/mt CFR and may breach $420/mt CFR in the coming period. Turkish mills have not completed their purchases for February shipments, and there is a long to go to complete bookings for March shipments. The March order books of Turkish long steel producers are lagging behind. “There are even some gaps in February order books,” a source reported. A representative of a Turkish mill commented, “Sometimes finished steel prices follow the scrap market trend and not the other way around. This may be the case in the coming days.” A trader in the local rebar market said today that traders’ inventories are in good shape, “We are waiting to see the demand from construction sites, though I do not believe we will see the traditional surge in mid-February this year. Since the winter has been more or less without the usual rain and snow in Turkey, construction did not slow down as usual,” the trader reported.
Currently, some players consider that the workable level for Romanian and Bulgarian short sea scrap is in the range of $380-385/mt CFR Turkey. However, neither sellers nor buyers are interested in this price level. Previously, the range of short sea scrap quotations was at $375-385/mt CFR due to the pressure exerted on short sea sellers. While the deep sea scrap market remained firm, the short sea market is now silent but firmer.