Turkish mills continue to cover their scrap needs for August deliveries. A new ex-US scrap deal was done yesterday, while more bookings from last week have surfaced in the market today, July 23.
The ex-US transaction was closed by a steel producer in Turkey’s Black Sea region yesterday for HMS I/II 80:20 scrap at $347/mt CFR, with shredded and bonus grades at $367/mt CFR. This price level is the same as those recorded in previous ex-US scrap bookings. There are offers from the US to Turkey at around $350s/mt CFR. A source in the US stated that all suppliers are in the market seeking a buyer. This makes it harder for US scrap suppliers to push for a meaningful increase in CFR Turkey-based prices.
Meanwhile, an ex-UK booking by an Izmir-based steel producer concluded on Friday, July 18, has been shared with the market, with the HMS I/II 80:20 scrap price standing at $340/mt CFR. An ex-Netherlands deal was also closed by an Iskenderun-based producer late last week for HMS I/II 80:20 scrap at $340/mt CFR, market sources report. These levels also indicate that ex-UK/EU scrap prices have remained stable in the range of $340-342/mt CFR. Two ex-EU scrap cargoes were sent to Egypt. Meanwhile, there are ex-UK/EU offers in the market asking for $340-345/mt CFR from the buyers, depending on their origins.
While some excitement is observed in Turkey’s import scrap market resulting from the upward movements seen in Turkey’s local rebar market as well as from the optimism in Asia, SteelOrbis believes the potential for an increase in scrap prices is limited for now. Additionally, some sources report that, after the upward surge in prices following the recent news about supply reforms and expected stimulus measures in China, futures prices in China are now showing much less volatility as they have already increased too much, since the increases were partially speculative and not based on fundamentals. As SteelOrbis reported yesterday, the ex-China billet reference price increased to $450-460/mt FOB, up $20/mt since Friday, and most export quotations are stable today. A source at a Turkish producer today commented, “Under the current conditions, billet is out of the game, and we may be focusing on scrap in the coming month instead.” As of today, official rebar prices of Turkish mills are in the range of $540-565/mt ex-works. However, SteelOrbis considers $535-555/mt ex-works workable, with the upper end representing the Gebze region. As SteelOrbis reported today, Turkey's Kardemir opened its rebar sales at $551/mt excluding VAT and closed them in less than 15 minutes. Sources report that the mill succeeded in selling around 30,000 mt due to its advantageous payment terms. The price indicated a $14/mt rise, compared to its previous price list dated Wednesday, July 9. As a last note, the market expects the Central Bank of the Republic of Turkey (CBRT) to lower the one-week repo auction rate by 250 basis points to 43.5 percent at its July 24 meeting, according to the median estimate of institutions participating in Bloomberg HT's interest rate survey. This expectation has given support to some restocking activity in the rebar market, market sources report, though the tonnages voiced are still considered very low as compared to a normal day.