One Turkish steelmaker has concluded three deep sea scrap bookings, with prices remaining firm for now. Sentiment in the market is still positive, while SteelOrbis hears that the number of willing buyers has increased today, March 7.
SteelOrbis has learned that a Marmara-based mill yesterday concluded an ex-US deal for HMS I/II 90:10 scrap at $462/mt CFR and shredded scrap at $477.50/mt CFR. The cargo will be shipped in April. According to the information on hand, the HMS I/II 80:20 scrap price is estimated to be around $456.5-457,5/mt CFR. Previously, SteelOrbis’ reference price for ex-US scrap was at $460/mt CFR, signaled by last week’s ex-UK booking closed at $455/mt CFR. Market players believe that the UK cargo in question was mainly composed of higher than HMS I/II 80:20 scrap grades. Therefore, this small reduction in ex-US scrap quotations is not considered a softening.
Another ex-EU booking was done by the same Marmara-based producer with the average price level at $460/mt CFR, again yesterday. Although the parties did not confirm the details of the cargo, some rumors of 24,000 mt of HMS I/II 80:20 scrap, 8,000 mt of shredded scrap and 8,000 mt of bonus grade scrap have been heard. These details have indicated a price level of an approximate $352/mt CFR for the benchmark HMS I/II 80:20 scrap, $3/mt lower than the ex-UK booking above.
An ex-Baltic cargo is the third one bought by the same Marmara-based steelmaker, with HMS I/II 80:20 scrap at $456/mt CFR. This level is in the range of SteelOrbis’ current reference prices of $455-460/mt CFR.
Despite the small decline observed in deep sea quotations as compared to the estimated price levels, SteelOrbis believes that Turkey’s deep sea scrap market is set to move up. One seller commented that buyers are now convinced that deep sea scrap quotations are not going down. “The fundamentals of the market has not changed,” a supplier stated. Turkey still needs rebar for reconstruction, while its flat steel market is also strong. Meanwhile, billet prices are on the high side, not providing much of an alternative for Turkish mills. The silence observed last week was the result of the lively market in the previous week and now buyers are back making inquiries. Sentiment in the local US market is also positive and flat steel prices in the US are strong, hence providing support for domestic scrap prices. Turkey still needs at least 10-12 deep sea cargoes for April shipment. SteelOrbis hears that some producers even need cargoes to be shipped within a shorter term.