With three deals disclosed in Turkey’s import scrap market today, February 21, the uptrend in the market has continued. However, it can easily be seen that every deal has pushed prices up.
SteelOrbis has learned that an ex-UK deal has been closed by an Izmir-based producer today for HMS I/II 80:20 scrap at $428/mt CFR and shredded scrap at $453/mt CFR. The total tonnage of the cargo is 22,000 mt. The difference between shredded and HMS I/II 80:20 scrap is $25/mt in this deal. Previous to these deals, SteelOrbis’ ex-EU HMS I/II 80:20 scrap price was standing at $422.5/mt CFR on average.
An ex-Denmark booking was done by a Black Sea-based mill for 16,000 mt of HMS I/II 90:10 scrap at $439/mt CFR and 24,000 mt of busheling scrap at $467/mt CFR, for March shipment. The information on hand indicates that the HMS I/II 80:20 scrap price should be at around $430s/mt CFR.
Additionally, an ex-Estonia booking was made by another Izmir-based deal yesterday, February 20, for HMS I/II 80:20 scrap at $430/mt CFR and bonus grade scrap at $450/mt CFR. Previously, SteelOrbis’ ex-Baltic HMS I/II 80:20 scrap price was already at $430/mt CFR on average.
Rumors that US sellers are now targeting sales prices of $440/mt CFR for scrap cargoes to Turkey have already begun to permeate the marketplace.
The scrap flow in the EU region is on the low side, market sources mentioned today. “There are several reasons, but I think the most important one is the lower generation rates amid tight economy and slower manufacturing,” a Germany-based source reported. The collection quotations in EU-based export yards have also recovered quickly to €355/mt DAP levels but SteelOrbis hears that sub-collectors are in no rush to sell even at these levels. “We kept our inventories from December and merged them with the January flow, but from now on we will remain cautious. This is the beginning of the current year, no one wants to make a mistake by deciding quickly,” a source from Germany commented. It should be reminded that Iskenderun-based mills are returning to production in a slow and gradual rate. Also, according to the experts, it is normal to expect smaller aftershocks in the region for the coming six months to a year. “This can cause short-lived disruptions in efforts to return to production, or even after all mills are online,” SteelOrbis understands.
Turkey’s billet demand is also increasing amid the rising scrap market, some mills and most rolling mills are focusing on securing billets for the future. There is not much billet in the market, Iran is still experiencing problems about the gas flow, also has an upward impact on DRI prices and billet prices coming out of that region. Under the current circumstances, SteelOrbis estimates that soon the import billet offer prices might reach the range of $610-630/mt CFR Turkey from Russia, especially if the domestic billet in Turkey reaches the higher level due to limited availability. The latest levels for billet that are fixed in deals and negotiations were at $600-615/mt CFR Turkey, again from Russia. Ex-Asia offers are at up to $630/mt FOB this week, which is not considered workable in Turkey, taking into account the freight rate estimated at around $40/mt. A producer commented that it is debatable if Turkish mills can aim for a averagely lower production cost by adding billet in the pool.
The short sea scrap segment is no different than the deep sea segment. A Bulgarian scrap deal for HMS I/II 80:20 scrap was closed at $408/mt CFR Turkey yesterday, while today another one was closed at $416/mt CFR Turkey. “We hope prices to reach to $425s/mt CFR, that’s where we aim,” a Bulgarian source commented. Another one thinks that the workable levels of Romanian HMS I/II 80:20 scrap prices is in the range of $415-420/mt CFR. The collection prices in the short sea supplier regions are also increasing. “This is leading people to wait and stop selling,” a source reported.