Turkey has made a silent start to the current week in terms of scrap imports amid its exchange rate crisis and due to the turmoil in the political arena in Turkey which carries further risks for the local currency. While the Turkish lira has lately appreciated slightly against the US dollar, market players hold various opinions about the future trend of Turkey’s import scrap market.
SteelOrbis has learned that a Marmara-based producer has concluded an ex-US deal for 20,000 mt of HMS I/II 90:10 scrap and 10,000 mt of shredded scrap at the average price of $513/mt CFR. Some players stated that the cargo consists of HMS I/II 95:5 scrap instead of HMS I/II 90:10, but no further details have been disclosed about this deal. While the premium paid for the higher grade is not known, estimations for HMS I/II 80:20 scrap based on the information received are in the range of $502-503/mt CFR. Before this deal, SteelOrbis’ ex-US HMS I /II 80:20 scrap quotations were in the range of $500-505/mt CFR Turkey.
With Turkey taking a break due to the October 29 Republic Day holiday tomorrow, not much is expected to change in the import scrap market before the end of the week. Turkey has concluded enough deals for November shipments, and so the Turkish mills have at least ten to fifteen days if they wish to wait before concluding more deep sea bookings for December shipments. This may exert pressure on deep sea scrap prices. Some market players think that the Turkish mills will take this opportunity given their lack of finished steel export sales. Particularly, rebar producers are expected to try to lower deep sea scrap prices in the coming period as flat steel producers are seeking higher grades. On the supply side, the HMS I/II 80:20 volume is healthy, while the volumes of higher grades are still on the low side. Turkish mills report that there are deep sea scrap offers in the market. Much will depend on US-based suppliers’ future strategy with regard to Turkey. The local US scrap market is expected to move up when the November buy-cycle starts. The ship availability problem persists, while freight rates are still volatile, SteelOrbis understands. A Turkish steel mill stated that the lack of exports is putting producers in a tight position, and that there are no deep sea deals done for shipment in the second half of December. “US suppliers have some alternative destinations for scrap at higher prices, and so they are targeting $420/mt CFR and above for shredded and bonus scrap to Turkey,” he adds. With the high freight numbers, deep sea scrap prices have little room to decline, SteelOrbis understands. Accordingly, despite the uncertainties in the market, deep sea prime grade scrap prices are expected to remain stable in the coming period, with a slight downtrend tendency.