As the week comes to a close, Turkey’s import scrap market has failed to gain momentum, with only limited deals being concluded. Two new ex-Baltic bookings signal a very slight recovery, though almost all market players believe that the actual trend of the market will be determined next week.
SteelOrbis has learned that an ex-Latvia deal closed by a Marmara-based producer consisted of HMS I/II 80:20 scrap at $339.5/mt CFR and bonus grade scrap at $359.5/mt CFR. This cargo is scheduled to be shipped in the first half of July. The second booking, also closed by the same mill from Lithuania, consisted of HMS I/II 80:20 scrap at $339.5/mt CFR and bonus grade scrap at $359.5/mt CFR. Although these prices from the Baltic region are lower than the previous ex-Scandinavia deal closed at $340/mt CFR, the Scandinavian cargo is considered to be of higher quality. As a result, SteelOrbis has revised its ex-Baltic prices to $339.5–340/mt CFR for now.
There is also an ex-US booking by an Izmir-based producer for HMS I/II 90:10 scrap at $345/mt CFR. This price suggests that the workable price for HMS I/II 80:20 scrap from the US is currently around $342/mt CFR Turkey, reflecting a modest increase of $1/mt week on week. The $342/mt CFR level for ex-US scrap is in line with the traditional price gap between the US and Baltic regions, and the aforementioned ex-Baltic deals support this new level.
Turkish mills’ procurement pace of deep-sea scrap cargoes has drawn attention. Market sources report that Turkey has not secured enough cargoes for July shipment. Several producers report that they may be forced to cut production, as SteelOrbis previously mentioned. Some sellers are still trying to keep their prices firm, while others have lowered their offers to Turkey over the past week, dropping their quotations by $5/mt. “I am not sure whether this $5/mt cut will be enough to rouse Turkish mills’ interest. I think the main fundamentals are still negative, particularly on the rebar side,” a seller commented today. Another supplier believes prices are still likely to increase unless Turkey reduces its capacity utilization rates: “They need to buy scrap. When they return to the market, prices will move up.” However, a source from a mill reminded that this scenario has been experienced before: “It is not like Turkey is trying to negotiate for lower prices. We really have a disruption in the cycle. When there are no sales, further worsened by the significant uncertainties surrounding our region, we [Turkish mills] are trying to aim for the upper end but avoid causing losses for our companies.”
On the European side, market sources report that most mills are planning to close for the holidays in July. Early holiday plans will also cause the domestic European scrap flow to shift toward exports. Some market sources report that some sellers are holding large inventories, which may force them to accept price cuts simply to clear out their export yards.
The first indications for the local US scrap market are mixed; the general sentiment for now is a sideways to slightly upward movement. However, market sources in the US are also warning about the rapid changes in trading measures, which largely shape the local steel market. “With several ongoing uncertainties about trade tariffs and rising protectionism, and now the Israel-Iran conflict, this weekend could be important for the situation in Iran; we may see either a ceasefire or an escalation. I think by Monday, or at most Tuesday, we will have a clearer price trend in Turkey’s steel and scrap markets,” another scrap supplier commented.