With Venezuela becoming a reliable source of deep sea scrap, scrap prices from the country are also rising for Turkey.
SteelOrbis has learned that an Iskenderun-based mill concluded a deal from Venezuela yesterday, October 20, for 25,000 mt of HMS I/II 80:20 scrap at $505/mt CFR. The cargo will be shipped in the second half of November. Although Venezuelan cargoes are not considered indicative in Turkey, the price has attracted attention since it is higher than yesterday’s HMS I/II 80:20 scrap price in the latest ex-Baltic booking closed at $502/mt CFR for December shipment.
Also, there is another rumor about an Izmir-based mill booking an ex-Venezuela cargo consisting of HMS I/II 80:20 scrap at $495/mt CFR and bonus grade scrap at $515/mt CFR. The total tonnage is reportedly 25,000 mt. The date of this transaction has not been disclosed, but a Venezuelan source said that HMS I/II 80:20 prices in the country are at above $500/mt nowadays and that this deal must be an older one.
Market sources consulted by SteelOrbis stated that there are no offers for November shipments in the market, and so this deal was closed on the high side in terms of price. “Offers from other regions were higher, and all of them are for December shipments,” one source commented. According to the data for Turkey’s scrap imports in the first eight months this year, Venezuela ranked tenth row as a scrap source with 519,273 mt, surpassing Germany, Poland and Canada behind. “They have proved themselves to be reliable source for Turkey,” a source stated, with this view supported by other sources.
Some US-based suppliers are still waiting for higher prices or are offering around $510/mt CFR Turkey amid their expectations of a further rise in their local market. Prices in the local US scrap market are expected to move up $21-51/mt in the November buy-cycle. One US cargo seller stated, “Producers will decide the price in the coming days. It is early to make an estimation.” Having said that, there are rumors about Russia planning to prolong its scrap export duties for 2022. No official statement has been issued yet by the Russian authorities.
Additionally, short sea HMS I/II 80:20 scrap prices for Turkey from Romania and the Adriatic region are now in the range of $480-485/mt CFR, rising by a further $5/mt. These prices are fixed in deals to various regions. “The number of ships in the region is still problematic and freights are rising,” one player has reported. There is demand for short sea scrap, while supply is not so great, SteelOrbis understands. Also, the workable prices for ex-Israel HMS I/II 75:25 scrap are still considered to be around $470/mt CIF Iskenderun.
With the sharp decrease observed in China’s futures markets today, market players believe that the sentiment for the billet market is not good. Much depends on developments in China as, when it slows down billet imports, CIS-based producers may need to become more active in sales to alternative destinations, including Turkey. However, the billet price which is standing at around $710/mt CFR on average in Turkey is considered by local steelmakers to be overpriced in relation to scrap.
Meanwhile, the Turkish Central Bank cut its interest rates by 200 base points today to 16 percent. The impact of the decision has been felt immediately in the market with the Turkish lira depreciating to 9.44 against the US dollar. One trader stated, “The sharp fluctuations in the lira create a mood of crisis in the market, so buyers that can postpone their purchases will do just that.” Even a major producer such as Icdas decided not to issue domestic rebar quotations today as it was waiting for the Central Bank’s decision.