While Turkey is still reeling from the impact of the destructive earthquakes in the southeast region of the country, trading for deep sea scrap has resumed this week. Turkey has managed to further reduce its deep scrap procurement price in a new ex-US deal.
SteelOrbis has learned that the ex-US booking was done by a Marmara-based producer for HMS I/II 80:20 scrap at $413/mt CFR, shredded and bonus grade scrap at $433/mt CFR. The total tonnage of the cargo is 40,000 mt. The cargo will be shipped in March. As a result, the HMS I/II 80:20 scrap quotations have declined from $418/mt CFR recorded earlier this week.
Turkey’s steel market still faces uncertainties as investigations to gauge the extent of damages in the earthquake-hit region are continuing. “Our first aim is to help our workers and their families, and provide them with stability,” a mill commented, adding, “Obviously, we want to be sure about the situation at ports, furnaces and rolling mills.” SteelOrbis understands that Turkish mills are determined to resume production as fast as they can. No deep sea scrap deals have been canceled by Iskenderun-based producers, with three ports in the region already operating. It should also be recalled that Turkish mills are supporting ongoing operations in the damaged cities, with some of their heavy machinery used in such operations. “When the machinery returns, mills will operate more easily,” a source commented. Another scrap supplier stated, “Iskenderun-based mills will be producing steel in March. Sellers are not aggressive and the market seems balanced.” The recovery in the Chinese market has attracted attention in Turkey and is being monitored closely. While some sources said that Egypt along with Bangladesh are in the market for deep sea scrap, India is also expected to start buying scrap once again.
Scrap collection prices in the EU-based yards have softened a little. Yesterday, February 15, a European scrap exporter’s bid to a German sub-collector for HMS I/II 70:30 scrap was at €320/mt DAP, with HMS I/II 80:20 scrap and E3 grade scrap at €330/mt DAP and €340/mt DAP, respectively. The ex-EU scrap prices will also be impacted by the softening euro-US dollar exchange rate. However, SteelOrbis observes that flow to export yards is not very strong. “The panic felt by scrap suppliers last week has changed due to the news that Iskenderun ports are now once again active. Also, local demand in the EU is strong,” a German source commented.
Meanwhile, rebar demand in Turkey’s spot market is slowly increasing. “The government’s promise to rebuild the region in one year is supporting the market. This is a huge project,” a trader commented. Another trader reported that “traders’ rebar demand is livelier in the last couple of days since everyone has heard that the government plans to buy 4 million of rebar in a three-to-four month period.” Turkey’s import scrap market mainly expects deep sea scrap prices to move down and then recover sharply with the Iskenderun-mills returning to the market after damage assessment.
The short sea HMS I/II 80:20 scrap is estimated to be at $400-405/mt CFR. Offers from the region are few, and some players are targeting higher than these levels and are willing to wait. “Some suppliers target $410/mt CFR, which is not possible right now after the recent ex-US deal though,” a source commented.
