Turkish mills have concluded some deep sea scrap purchases this week, while two deep sea cargoes from Russia has been disclosed to the market.
SteelOrbis has learned that an ex-St. Petersburg cargo has been bought by an Izmir-based mill, with HMS I/II 80:20 scrap at $495/mt CFR. This information has not been confirmed by the buyer or the seller by the time of publication, though the general opinion is that this deal has been done.
Additionally, another deep sea cargo totaling 14,000 mt of scrap from Murmansk has been bought by a producer in Turkey’s Marmara region at the average price level of $504.50/mt CFR. While the details of the cargo have not been disclosed to the market, market players believe it consists of HMS I/II 95:5 scrap and P&S grade scrap, signaling around $497/mt CFR for benchmark HMS I/II 80:20 scrap.
SteelOrbis observes that there are currently mixed sentiments amongst scrap market players. Some think that Turkey has not bought many deep sea cargoes for August shipment and will need at least 30 cargoes in the coming period. As Turkish steelmakers are still maintaining their wait-and-see stance and given the holidays in Turkey starting from July 15, some players think there will not be enough time for mills to buy the remaining cargoes they need at a normal pace. It is also observed that freight numbers are rising, that collection costs are still on the high end, that domestic demand in supplier regions is strong and supported by the shortage of prime grades. Many in the market think that Turkish producers will return to the market in full strength next week.
However, on the other hand, some market players think the market is very delicately balanced. One source commented, “It will all depend who can wait longest, and I think the mills will succeed. Prices may decrease $5-10/mt in the coming days.” A major Turkish mill also stated that Turkey will not buy as many deep sea cargoes as anticipated, with the unannounced deals already done, a maximum of 20 cargoes is more likely needed for August shipment. Another mill stated that there are too many variables to consider, and even the prices in the flats segment are under pressure amid the offers received from India. SteelOrbis believes that the lack of Turkish finished steel export sales and the slow trading activity in the local rebar market are also contributing to a more pessimistic mood among market players. The general opinion on Russia’s export duties is “it is too early to say anything”. “First the dumping of prompt cargoes from Russia will have to end for us to see the reality”, one player said.
