Late on Friday, May 30, a Turkish mill bought a cargo from a European scrap seller, with the benchmark HMS I/II 80:20 scrap price decreasing below $340/mt CFR again in the deal. $340/mt CFR is considered a threshold level. Turkish mills had tried to keep prices below this level when they were moving up earlier in May, before they eventually exceeded this price.
The ex-Belgium cargo in question was reported to consist of 25,000 mt of HMS I/II 80:20 scrap and 15,000 mt of a mixture of shredded and bonus grade scrap at the average price of $344/mt CFR. This information indicates that the HMS I/II 80:20 scrap price for this cargo stands at around $336.5/mt CFR, $6.5/mt lower than the previous deal done at $343/mt CFR, which was concluded from Germany. As a result, the ex-EU scrap reference price in Turkey has returned to the levels recorded on May 13-14 at around $334-338/mt CFR.
Accordingly, ex-US scrap prices will also move down. SteelOrbis’ estimations for ex-US HMS I/II 80:20 scrap now stand at $340-341/mt CFR, while the ex-Baltic HMS I/II 80:20 scrap price is expected to move down towards $339/mt CFR, below the $340/mt CFR level. The price drop in Turkey’s import scrap market had been expected by most market players, as SteelOrbis mentioned in its global scrap report published on Friday. The number of available cargoes looking for a buyer in Turkey is on the high side. Market sources report that offers for June shipments are still available, with bookings for July shipments already done by some Turkish buyers. Meanwhile, cheap billet is still an attractive option, according to sources from Turkish mills, though some players do not think that cheaper billets will be available in the long run. At present, Turkish mills are not inclined to take risks due to the uncertainties surrounding international trade. “The situation regarding tariffs changes very quickly. There is no way we can predict what’s to come next. We can call this the Trump factor,” a buyer commented. Another market player stated, “I have counted more than 15 cargoes being offered right now. This will inevitably put downward pressure on deep sea scrap prices. However, I do not think there is a strong downward potential due to the collection costs of scrap suppliers. They may accept the latest drop, but I expect them to resist further declines.” “Turkey’s import scrap market is soft. A gradual downtrend would not surprise me, though I do not expect it to be a quick one,” one scrap seller said. As a result, Turkey closed the month of May with a downward trend, which is expected to be carried over to transactions in early July. Turkey will be out of the market on June 6-9 due to the Feast of Sacrifice holiday, with most Turkish market players expected to turn this break into a week-long holiday.