As Turkish mills start to exert pressure on deep and short sea scrap prices, or at least try resisting further increases, some deals have been closed with prices signalling a relatively stable trend. Two ex-US scrap deals have been disclosed to the market today, August 11. US origin HMS I/II 80:20 scrap has failed to reach the expected levels of $400/mt and higher in the deals in question.
SteelOrbis has learned that a Marmara-based Turkish mill concluded the first ex-US booking with HMS I/II 80:20 scrap standing at $396/mt CFR, $2/mt higher than the previous ex-US transaction closed at $394/mt CFR towards the end of last week.
Another ex-US supplier has sold a cargo to an Iskenderun-based producer, with HMS I/II 90:10 scrap at $400/mt CFR. This deal signals levels of $394-395/mt CFR for benchmark HMS I/II 80:20 scrap. As a result, SteelOrbis’ daily price for HMS I/II 80:20 scrap has increased on the upper end to $394-396/mt CFR.
A booking from Baltic region was concluded by a steelmaker in the Marmara region earlier this week. The cargo consists of 33,000 mt of HMS I/II 80:20 scrap at $390/mt CFR and 5,000 mt of bonus grade scrap at $405/mt CFR. It will be shipped in the second half of September. This price is also the same as that recorded in the previous ex-Baltic scrap transaction.
“Turkish mills’ finished steel sales are insufficient to support the rise in the scrap segment. They have started to resist the price hike,” a supplier commented. Scrap higher than $390/mt CFR for premium deep sea scrap is considered unprofitable for steelmakers by some sources. While demand for September shipments is still seen, the disruption of scrap flow also continues, particularly in the EU. Several sources commented this week that they are having trouble finding the volumes they need to meet their previous commitments, and some have no further room to delay shipments and so are looking for alternative logistical solutions. A sub-collector stated that export yard offers were increased above €320s/mt yesterday, but today buyers report they can take a step back in one or two days. The changing sentiment in Turkey’s import scrap market is felt in the EU. According to one seller, the workable levels for US origin HMS I/II 80:20 scrap are at around $495/mt CFR, while for the EU they are in the range of $390-392/mt CFR. The EU also has some room to remain at around $385/mt CFR for some cargoes. As a result, the general price range has remained relatively unchanged after the bookings mentioned above. SteelOrbis thinks that the market has begun a sideways movement and that the future trend of scrap prices will depend on how much finished steel Turkish producers have already sold or will sell in the coming days.
The most recent ex-Bulgaria and ex-Romania deals for HMS I/II 80:20 scrap were done in the range of $380-385/mt CFR, showing that the gap between short and deep sea scrap has shrunk significantly. This also shows that mills are focused on short sea scrap to fill gaps in their inventories while trying to control the price rises in the deep sea segment.