Turkey’s ex-UK/EU scrap prices have declined below $340/mt CFR in deals done late last week, bring down scrap prices from other regions also. The reluctance of Turkish mills to conclude transactions in recent weeks resulted in an increased number of cargoes available for sale to Turkey. Some scrap suppliers have been more inclined to keep their offers firm, while others think prices can soften in the current quiet market conditions.
SteelOrbis has learned that an ex-UK booking was done by an Iskenderun-based steel producer on Friday, August 22, for HMS I/II 80:20 scrap at $337.5/mt CFR and bonus grade scrap at $360/mt CFR. The cargo will be shipped in late September, sources reported, adding that the HMS I/II 80:20 scrap totaled 15,000 mt and the bonus grade tonnage amounted to 25,000 mt, though these details were not confirmed by the parties. Meanwhile, an ex-Netherlands deal has been reported as having been done with the same buyer at $339/mt CFR. This information was not confirmed by the seller or the buyer by the time of publication. Today, August 26, another ex-Netherlands transaction was rumored to have been closed at $335/mt CFR for HMS I/II 80:20 scrap, but this rumor was denied by all the parties supposedly involved in the deal. In this overall context, SteelOrbis’ reference prices for ex-UK/ex-EU scrap have been reduced to $337.5-340/mt CFR, declining by $2.5/mt on average.
The collection prices at EU-based export yards have declined mostly to €250/mt DAP, while only one exporter is still willing to pay €255/mt DAP. The economic and industrial situation in Germany remains difficult. One source commented, “The manufacturing sector recorded its lowest month-on-month drop since May 2020, when production collapsed as a result of the coronavirus pandemic.” The situation in the US is also showing signs of a price decline for September, particularly for prime grades. However, increasing freight is the hot topic of the week. Suppliers from all regions mention that freight costs have increased sharply over the past week, causing additional costs for sellers. Meanwhile, the euro-US dollar exchange rate remains at 1.165 and gives little room for EU-based sellers to soften their offers, especially given the increased freight costs. Under the current conditions, SteelOrbis has revised its ex-US and ex-Baltic scrap prices to $344-345/mt CFR, down $2.5/mt. A European supplier said there is potential for a very slight decline in prices, but a significant drop is unlikely amid the above conditions. Another European scrap suppliers stated that a slide in prices is normal as Turkish mills have been out of the market for a long time. A US-based scrap seller said that prices will mostly remain firm and that the latest price decline due to some sellers who were in a hurry to sell. A source at a Turkish steel producer commented that they do not expect a sharp drop in prices and that stability should be expected in the coming days. Another player working for a Turkish mill also said they are currently meeting some of their demand for higher grade scrap from the domestic market.
On the other hand, there are few buyers in the market showing interest in deep sea cargoes. Amid the lack of steel sales and due to lowered capacity utilization rates, most Turkish steel producers are in a wait-and-see mood, trying to exert pressure on deep sea scrap offers. Import billet prices and delivery terms are still not attractive for Turkish mills, sources admit. They also add that their efforts to increase rebar prices have not been successful. As of yesterday, local rebar prices in the Turkish spot market had mostly fallen by TRY 100-300/mt ($2-7/mt) compared to August 21, except in the Marmara region where prices remained unchanged on lira basis with minor changes on US dollar basis, amid the ongoing exchange rate fluctuations and weak demand. Consequently, local 12 mm rebar prices in the spot market were trading at TRY 26,200-27,000 /mt ($533-549/mt) ex-warehouse, with the exchange rate at $1 = TRY 41.
In the short sea segment, ex-Romania deals were closed in the range of $325-330/mt CFR, unchanged week on week. One Turkish steelmaker is reported to have concluded a booking for HMS I/II 90:10 scrap at $338/mt CFR.