Contrary to the end of last week, Turkey’s import scrap market is closing this week with a sharp decline.
Staying relatively stable over the past week, a last minute ex-Scandinavian booking has been disclosed to the market, rumoured to have been done on Wednesday, August 31, with HMS I/II 80:20 scrap standing at $386-388/mt CFR. The details of the deal have not been shared by the time of publication, but most players believe that the deal has been done. Previously, ex-Baltic scrap prices were at $398/mt.
This recent price fall is not a surprise, as Turkey’s steel market is facing a big change on the cost side. One steelmaker commented today, “It is impossible to produce steel with the current input costs, particularly after the rise in natural gas costs. We all see that demand is very low right now both in the local and export markets.” Higher costs caused mills to increase their rebar quotations yesterday, but SteelOrbis observes that it is unlikely that prices will hold their ground. A scrap seller said, “How can they sell at these price levels? They were already struggling…” SteelOrbis also hears that there are some sellers in the market seeking opportunities to close deals, mainly from the Baltic and the US. According to another seller, “Deep sea scrap prices are set to decrease, but I think Turkey’s need for prompt shipments will prevent short sea prices from going down much.” According to some market players scrap prices have more room to decline, the previous relatively stable trend is considered artificial. According to a seller, “$385/mt CFR for premium grade HMS I/II 80:20 scrap is not far away.” On the other hand, a European seller is rumoured to have sold its cargo to Egypt, which was being offered to Turkey mid-week. The details of the cargo is not disclosed at the time of publication.
Accordingly, SteelOrbis reduced its short sea scrap prices to $360-370/mt CFR. No deals have been heard at this levels but while deep sea scrap prices are moving down, short sea scrap prices are unlikely to maintain their strength in the coming days.