New scrap deals done this week in Turkey have shown that deep sea scrap prices are remaining firm. Despite the mixed mood in Turkey regarding scrap prices and steel demand, suppliers have even managed to increase their prices a little.
SteelOrbis has learned that an Iskenderun-producer has concluded two ex-US bookings. The first consists of HMS I/II 90:10 scrap at $381/mt CFR and shredded and P&S scrap at $396/mt CFR. The second consists of HMS I/II 95:5 scrap at $381/mt CFR and shredded scrap at $396/mt CFR. Both deals indicate that benchmark HMS I/II 80:20 scrap quotations for US origin material are now at $376/mt CFR, moving up by $1.5/mt.
Meanwhile, another Iskenderun-based producer has concluded an ex-EU scrap deal for HMS I/II 80:20 scrap at $369.5/mt CFR and shredded scrap at $394.5/mt CFR. There is a rumour that the same seller concluded another contract to the Marmara region with HMS I/II 80:20 scrap standing at $369/mt CFR, though this information was not confirmed by the time of publication. Before these deals, ex-EU scrap prices were in the range of $365-370/mt CFR. Hence, European scrap quotations have increased by approximately $2/mt on average.
Lastly, it has been heard that an Izmir-based mill concluded an ex-Denmark booking with HMS I/I 80:20 scrap at $373/mt CFR. This information was not confirmed by the buyer or the seller, but is largely believed to be true by market players. This price level is $1/mt higher than the most recent ex-Baltic booking done by Turkey.
As a result, deep sea scrap prices have remained strong, despite the lack of steel demand observed in the Turkish market. No player in Turkey’s import scrap market expects an upward surge in deep sea scrap prices, but most sellers say that upward movement is necessary to sustain scrap flow. Suppliers continue to add that the Indian sub-continent is still active. A Turkish producer stated, “Shredded and bonus grade scrap in particular are hard to find. India’s biggest impact on scrap was the demand coming out of the country for higher grades.” A source said that traders’ reluctance to buy rebar is the result of the appreciation of the Turkish lira after the hike in Turkey’s interest rates. “But the Turkish lira will again lose strength, and traders will realize that scrap is remaining firm. So, they will eventually buy rebar at higher levels.” A rebar trader surveyed by SteelOrbis commented that domestic rebar prices may have already hit the bottom. Others are more pessimistic. Therefore, despite the slow acceleration seen in the rebar market, no significant recovery can be reported with the support of the abovementioned deals.
Turkey’s short sea scrap prices are in the range of $345-350/mt CFR for Romanian HMS I/II 80:20 scrap. The fluctuation of the short sea scrap segment is stronger compared to the deep sea side. Some Mediterranean scrap suppliers say very little interest is shown in their cargoes by Iskenderun-based producers. One supplier said, “They are already collecting a lot of material from the earthquake-hit regions. But they also do not want to work with cash, preferring letters of credit for deep sea cargoes.”