As anticipated by SteelOrbis, Turkey’s import scrap prices have moved up in the new deals done this week. The market is trying to find a balance between the supplier regions, though each offer shared with Turkish mills was closed quickly with a slight price increase.
SteelOrbis has learned that an ex-US scrap booking done by a Marmara-based steel producer has been closed at $355.5/mt CFR for HMS I/II 80:20 scrap, indicating a $1/mt increase for SteelOrbis’ reference price for this grade. Another ex-US cargo was shared with the market today, November 6, consisting of 25,000 mt of HMS I/II 90:10 scrap at $350/mt CFR and 25,000 mt of shredded scrap at $370/mt CFR. The cargo was from US West Coast to be shipped in December and caused short-lived turmoil in Turkey’s import scrap market due to its lower price. However, a US West Coast cargo rarely is sold to Turkey and is not a regular transaction. SteelOrbis has learned that the seller failing to buy a buyer in its traditional markets such as Vietnam or Bangladesh was forced to make a sale to Turkey. Therefore, this booking has not been accepted as a regular price indication by SteelOrbis. SteelOrbis’ reference prices for ex-US HMS I/II 80:20 scrap have been revised to $355.5/mt CFR for now.
An ex-Lithuania deal was closed by a Turkish mill, reported to be in the Izmir region, with the HMS I/II 80:20 scrap price standing at $350/mt CFR. Meanwhile, an ex-Denmark booking by a producer in the Black Sea region of Turkey has been done at $352/mt CFR for the same grade. As a result, SteelOrbis’ reference prices for ex-Baltic scrap have been corrected down by $1/mt to $350-353/mt CFR.
An ex-France booking done by a Marmara-based steel producer was closed at $349/mt CFR for the benchmark HM SI/II 80:20 scrap at $349/mt CFR. SteelOrbis has increased its reference prices for ex-UK/EU scrap to $349/mt CFR, up $1/mt as compared to previous level.
Lastly, an ex-Venezuela transaction is reported to have been done by an Izmir-based producer with HMS I/II 80:20 scrap standing at $349/mt CFR, though this deal is also not an indicative level for the overall deep sea scrap market.
Meanwhile, market sources report that there is significant difficulty experienced regarding ex-Romania cargoes: freight rates have increased sharply, and the lack of vessels is felt daily. Market sources report that offers shared by Romanian suppliers have reached $350/mt CFR and above for Turkey, with some for HMS I/II 80:20 and some for HMS I/II 90:10. Under the current circumstances, some suppliers have refrained from offering, while other offers shared with Turkish mills were rejected due to high price levels.
Meanwhile, European sources report that the collection prices of exporters have increased to €255-257.5/mt DAP today. “This level is almost on a par with what local producers are paying. Also, I must state that export yards are not that picky about the grade,” a German sub-collector said. While European producers do not agree that there is a shortage in scrap supply, sub-collectors are telling another story. The slower generation from industrial production is impacting supply volumes, but that is not the only problem observed. The cost-profit balance in the EU scrap market is reported to be broken and sub-collectors signal that they need higher sales prices to export yards or the local market to earn money. Turkish mills’ recent flurry of deep sea scrap purchases is triggered by their urgent need for scrap. Producers report that their rebar sales are going fairly well, while domestic rebar prices are also increasing and are accepted by traders. Meanwhile, this recent revival in demand is expected to continue for now, though winter will take its toll on demand in the end. Hence, when this first round of scrap purchases ends, the upward pace of prices may slow down. Some sources think that ex-US scrap prices may approach $360/mt CFR, but none think this level will be exceeded. US suppliers are inclined to keep lower inventories towards the end of the year, while all sales done by European sellers towards the end of the year mean more taxes for them. This may motivate suppliers to conclude sales even if the uptrend of prices slows down, SteelOrbis believes, though it is still too early to say. For now, deep sea scrap prices are expected to remain firm and Turkish mills will still show eagerness to conclude deals.
