In the second half of the current week, sentiment in Turkey’s import scrap market was very negative, with Turkish mills exerting significant pressure on prices. As of today, October 20, a sharp decline in prices has been confirmed, while market players have diverse ideas on what the future trend will be.
SteelOrbis has learned that an ex-US scrap cargo was sold to Turkey’s Marmara region consisting of HMS I/II 80:20 scrap at $355/mt CFR and shredded and bonus grades at $375/mt CFR. The cargo will be shipped in November. This price is $7.5/mt lower than the previous estimations.
Also, an ex-Netherlands scrap deal has been concluded by an Iskenderun-based producer, with 26,000 mt of HMS I/II 80:20 scrap at $348.5/mt CFR and 6,000 mt of bonus grade scrap at $368.5/mt CFR. Additionally, an Izmir-based producer is rumored to have bought another ex-EU scrap cargo, with HMS I/II 80:20 scrap standing at $345/mt CFR. This information was not confirmed by the time of publication, but the deal is largely believed to have been done by market players. Hence, SteelOrbis’ ex-EU benchmark scrap price has been lowered by $10/mt.
SteelOrbis hears that the collection prices of European scrap exporters stand in the range of €275-290/mt CFR, depending on the grade. However, scrap flow to export yards is still slow. Meanwhile, a major US scrap supplier said that HMS I/II 80:20 scrap flow to US-based export yards at normal levels, while a slowdown of approximately 15-20 percent is observed for shredded scrap flow. The same supplier said, “Turkey will buy another 15 deep sea cargoes minimum, and there is enough availability to cover that on the suppliers’ side. I do not think there is big room for a further decline, but it is not possible to say whether this is the bottom or not.” Some believe European scrap prices may move down to $340s/mt CFR, pushing ex-US scrap quotations below $355/mt CFR also. Today, a source at a major Turkish producer commented, “Although flat steel finds some demand in the market, the long steel side is dead. We expect scrap prices to move down gradually in the last quarter if long steel demand does not recover. Also, the Turkish lira continues to lose strength against the US dollar. Without any proper demand, we are forced to lower our dollar-based domestic rebar prices with each change in the exchange rate.” Another supplier of scrap from the EU and US reports demand received from Turkish mills is also on the low side, adding, “Under the current circumstances, I do not expect mills to start a rapid search for a high number of cargoes. Hence, an upward correction in prices is unlikely. But prices can move in a very narrow range while producers conclude their purchases for November. This may be the bottom.”