Turkey has continued to achieve a further decrease in deep sea scrap prices in a new ex-US deal, and the downtrend of the market is expected to continue in the coming days. Turkish mills are still exerting pressure on scrap prices as they are trying to lower their average raw material costs.
SteelOrbis has learned that an ex-US scrap booking was done by an Iskenderun-based producer for 18,000 mt of HMS I/II 90:10 scrap at $368/mt CFR, 5,000 mt of shredded scrap at $386/mt CFR and 2,000 mt of bonus grade scrap at $386/mt CFR. The cargo will be shipped in mid-July. The estimation for the benchmark HMS I/II 80:20 scrap in this deal is at $363-365/mt CFR Turkey, $32-35/mt lower than the previous levels.
There is also a rumor of an ex-US deal to the Marmara region closed at $372-373/mt CFR for HMS I/II 80:20 scrap in the current week. This rumor was rejected by the parties rumored to be involved. Nevertheless, the price in the deal in question does not matter right now. Currently, SteelOrbis’ reference price for deep sea HMS I/II 80:20 scrap is standing in the range of $350-365/mt CFR, while prices are expected to maintain their downtrend in the coming round of bookings.
Meanwhile, SteelOrbis has also learned that two deals from Europe have been done to Bangladesh, with HMS I/II 80:20 scrap prices standing in the range of $400-410/mt CFR. This is at least the ninth cargo from Turkey’s traditional suppliers that has been sold to an alternative destination during the month of June. As SteelOrbis mentioned before, some international suppliers are seeking buyers in the alternative regions such as the Indian subcontinent and Asia, where the price levels are more attractive.
“We are in a freefall in terms of price. Unless Turkish mills’ sales recover, we do not see any bottom in prices,” a seller reported. A major European scrap supplier stated that they are still out of the Turkish market and are focusing on other regions. “I do not think this latest fall is similar to 2008. I think the reasons for the current collapse in the scrap market are different this time. But I can say that everyone has been mistaken about the expected bottom levels of prices over the past weeks,” a contact from a mill commented, adding, “This sharp decline in scrap prices is not helping anybody, and is even negatively impacting steel sales on various levels.” According to another Turkish steel producer, “Although there are some sales to the local and export markets, the tonnages are not enough.” Market players admit that it is a tough time for the steel industry and that a recovery in steel sales is a must for a stabilization in scrap quotations. Also, Turkey is now in a unique position and has its own growing problems. A SteeOrbis contact stated, “I do not remember another time when Turkey was so isolated in the international scrap market before.” International financial difficulties are also taking their toll on future plans and evaluations of players. It is observed that, particularly in the long steel segment, financial issues are preventing new projects from starting and the construction season is expected to pass without meaningful tonnages changing hands. A local rebar trader in Turkey said that domestic construction sites are not active enough, adding, “The holiday season is approaching, and in September the traditional construction season closes in Turkey.”
In the short sea segment, ex-Romania HMS I/II 80:20 scrap prices are estimated to be in the range of $330-340/mt CFR and below. Turkish mills’ bids for ex-Israel HMS I/II 75:25 scrap is below $300/mt CIF Iskenderun right now. The workable levels for this grade are considered to be in the range of $295-300/mt CIF. There is a rumor of a small ex-Italian scrap deal for HMS I/II 80:20 scrap sold to Turkey at $315/mt CFR, exerting further pressure on the short sea segment. A source reported that the figures for ex-Mediterranean scrap are below $300/mt CFR.
