The outlook for Turkey’s import scrap market is pessimistic today, August 13. Following the silence observed in the current week, there are several offers from the deep sea segment to Turkey. With Turkish mills’ lack of appetite, prices are under pressure once again.
SteelOrbis has learned that there are two ex-St. Petersburg cargoes offered to Turkey: one seller is asking for $455/mt CFR and may accept around $450-452/mt CFR, while the other cargo is prompt and market sources believe that levels around and even lower than the $450s/mt CFR could be accepted by the seller. On the other hand, an ex-Estonia cargo is rumored to be offered at $462/mt CFR. Meanwhile, an ex-UK cargo is reportedly offered at $445/mt CFR along with an ex-Germany cargo, with the seller giving the impression of being ready to sell at $445/mt CFR, according to sources. There is at least one ex-US cargo offered to Turkey, but the price has not been disclosed by the time of publication.
As a result, deep sea scrap prices are under stress, while the market is waiting for a new booking to show the real trend, though the expectations are more or less for another decrease. The need for some positive development is gaining strength, not just for a change in trend but also for a stabilization of deep sea scrap prices. While prime scrap grades are sought all over the world, one market player stated that the volume of HMS grades is the problem and that “anyone aiming to sell a cargo to Turkey to deplete his HMS inventories needs make a sacrifice on prime grade scrap prices to be successful”. Also, a source at one Turkish mill stated that they are not experiencing a problem with buying shredded anymore, adding that “everyone who wants to buy shredded can find it.” SteelOrbis observes that the priority of Turkish producers is still their finished steel sales. Turkish mills’ order books are fairly full for September, and most mills state they are offering for October shipments, though market sources state that there is still some place for September orders. Freight rates are a big factor for all sides.
On the short sea side, SteelOrbis has revised its estimations for HMS I/II 80:20 scrap from Romania and the Adriatic region to $420-425/mt CFR. Demand has revived slightly this week on the short sea side, though Russian suppliers are still out of the market amid the high export duty and still rising freight numbers. However, an increasing number of market players state that Turkish mills have also bought large tonnages from Libya.
The Turkish domestic rebar market is also silent today. With the Turkish Central Bank deciding to keep interest rates stable at 19 percent, the Turkish lira is fluctuating in a narrow range. Traders want to wait for next week before making a move as they had bought large tonnages last week and have inventories on hand. Also, the negative sentiment surrounding the scrap market is causing them to be cautious. In the meantime, Turkish steelmaker Kardemir decided to close its domestic rebar sales without receiving orders after the Central Bank’s announcement.