Turkey continues import scrap purchases at a slow pace, taking into account insufficient finished steel sales and gloomy outlook for the near future and the expected maintenance works during summer. Mills are there to purchase for August shipments and seem to be under no pressure to book. The latest deal has been closed from the UK, indicating a softening of the ex-Europe benchmark price.
An Iskenderun region-based steel producer has closed a deal for 22,000 mt of HMS I/II 80:20 from the UK at $367/mt CFR versus the previous indicative range of $370-373/mt CFR from earlier this week. The ex-US import scrap price remains at $375/mt CFR according to the latest deal and there might be some resistance from the sellers, taking into account the stabilization of the local scrap prices in the US.
According to sources, the import scrap price ranges have not stabilized at normal levels, while previously the ex-EU and ex-US scrap prices have been “too close to each other”. Many however believe that it is a signal for the price decline, which might be additionally heated up by today’s billet price adjustment in Turkey might soon have their toll on the scrap price situation.
Today, July 12, integrated Kardemir has announced the local billet price at $525-530/mt ex-works depending on the grade which is $40/mt down over just one week. Such a move turned out to be a shock for the market and the market players believe that the mills’ pressure on the import scrap might increase. “We need to put flags before or after Kardemir’s announcement. This [ex-UK deal] was done before, but now, if the mills will need to adjust to new billet price reality, they will aim for lower scrap,” a trader told SteelOrbis. “For that billet price the import scrap for EAF mills has to be at $355/mt,” another source commented.
In the domestic rebar market, some of the mills have already dropped the prices to $585/mt ex-works, while others are at around $600-615/mt ex-works and above. Currently, the spread between scrap and rebar is estimated at around $205-210/mt.
