As Turkey completes its scrap purchases for October shipment, Turkish steel producers have started to seek available cargoes for November shipment. Few deals have been done for this shipment period if any, while sellers maintained a cautious stance during the IREPAS conference held in Munich. As scrap suppliers expect deep sea prices to remain firm with a tendency to increase, they are in no rush to conclude sales to Turkey.
SteelOrbis has learned that an ex-Lithuania deal was done by an Iskenderun-based producer late yesterday, September 30, for HMS I/II 80:20 scrap at $341.5/mt CFR, with shredded and bonus grades at $361.5/mt CFR. As a result, ex-Baltic scrap prices are now at $341.5-342/mt CFR, stable as compared to the previous ex-Baltic deal done from Sweden.
Meanwhile, an ex-Canada cargo was bought by an Izmir-based producer. The cargo consists of P&S and bonus grades, totaling 10,000-15,000 mt reportedly. Market sources report an average price of $362.5/mt or $365/mt CFR, though, due to the lower tonnage of the cargo, this deal is not considered indicative for the benchmark HMS I/II 80:20 scrap. SteelOrbis’ reference prices for ex-US scrap have remained at $342-344/mt CFR for now.
Another ex-US scrap booking was done by a Greek steel producer with HMS I/II 80:20 scrap standing at $347/mt CFR. The discharging period for the mill is reportedly longer than that for any Turkish producer, and so the higher price in this deal also indicates that ex-US scrap prices for Turkey stand at $343/mt CFR.
Currently, offers from the US for benchmark HMS I/II 80:20 scrap are at $350/mt CFR. US sellers are not inclined to accept lower price levels, market sources report, citing their struggle to collect HMS grades from their local market. As SteelOrbis reported in its previous reports, the livelier demand in the local US market for HMS grades is the result of stronger domestic rebar demand after the import tariffs. “There is potential for ex-US scrap prices to move up towards $348-349/mt CFR again. Turkish mills have not bought cargoes for November shipments yet. Therefore, when we started to seek them, we realized that there are not many offers,” a source at a Turkish producer commented today, October 1. On the other hand, the number of Turkish mills that are in the market is on the high side, supporting the idea that higher price levels in actual deals can be expected in the coming round of bookings. European sellers are under pressure from their collection costs and the euro-US dollar rate and scrap flow to yards is still slower than usual. “This means the bottom of deep sea scrap prices is very firm. Although we expect prices to move up slightly, we do not expect them to exceed the $348-349/mt CFR range,” another buyer from Turkey told SteelOrbis. “The deals done during IREPAS are not expected to be repeated in terms of prices. We are aiming for higher levels and think a slight increase is very possible,” a European scrap supplier commented.
The peak level of average deep sea scrap prices this year was at $379/mt CFR, which was recorded at the end of March. Then prices dropped like a stone to $319/mt CFR and since May they have remained in the range of $331-345/mt CFR, both average prices. Due to the lack of support from the finished steel segment, deep sea scrap prices are expected to remain in a limited range for now. Despite the upward tendency accepted by all players, deep sea scrap prices are not set to move up at a fast pace.