Sentiment in Turkey’s import scrap market is negative, most market players await deep sea scrap prices to soften.
A Baltic deal closed today, February 6, by an Izmir-based producer indicates that HMS I/II 85:15 scrap price now stands at $421/mt CFR. The cargo will be shipped in the middle of March. While the total tonnage is 27,000 mt, SteelOrbis has learned that the majority of the cargo is HMS I/II 85:15 grade. This deal shows that benchmark HMS I/II 80:20 scrap from Baltic is now priced $419/mt CFR, $3/mt lower than the previous levels.
High number of offers reportedly shared with Turkey. According to several Turkish mills there is at least 10 deep sea cargoes looking for a willing buyer from various regions. Ex-US cargoes are seen as the weak link. “The willingness of US-based suppliers is exerting pressure on the EU segment. US domestic market does not provide any support to exports,” a source from a mill said today. While European scrap suppliers state they cannot cut their offers to Turkey below $420/mt CFR due to their collection costs and the ongoing slow flow to export yards, they may be forced to. A European scrap supplier thinks “$416-417/mt CFR may be accepted by sellers in the coming week. Weather will be better in March and if one believes warmer environment will cause scrap availability to increase, why not?”
On the other hand, some sources think that Europe’s resilience to keep their prices firm also causes US to remain stronger than it should. “If Europe had the margins to cut their offers to Turkey, I do not think US would press for $420/mt CFR and above. They would probably accept lower than even this,” one source commented. Another important aspect was voiced by several market players, “Turkey has bought high number of cargoes to be shipped in February and January numbers were also on the good side.” Therefore, no rush on the buyers’ side is observed to move on for March shipments. Having said that, many players believe that when the winter conditions in Turkey comes to an end, demand for finished steel would recover and give Turkish mills some breather.