Having declined sharply last week, an ex-Baltic deal has been done in Turkey this week at a lower price. Some sellers are not convinced that these levels are sustainable, citing their collection costs. Some buyers, on the other hand, have said that they are confused as these price levels were rejected by most sellers late last week. The general range of deep sea HMS I/II 80:20 scrap prices has dropped by $19/mt since the beginning of June. Late March was the last time the current level was recorded in Turkey’s import scrap market.
SteelOrbis has learned that an ex-St. Petersburg cargo was sold to an Izmir-based steel producer at $387/mt CFR for HMS I/II 80:20 scrap. The cargo will be shipped in early August, market sources report. “There is only one Turkish mill in the market showing interest in an August shipment cargo. No other mill has completed its scrap purchases for July,” a source at a Turkish mill said today, June 16. SteelOrbis has revised its ex-Baltic scrap reference prices to $387-392/mt CFR, as this ex-Russian cargo differs from other ex-Baltic cargoes in terms of payment terms and risk premiums.
There are rumors of other older ex-UK and ex-EU scrap deals, reportedly signed last week by the same supplier, with HMS I/II 80:20 scrap prices at $390/mt CFR and $388/mt CFR, respectively. While this information has not been confirmed by the time of publication, some market sources told SteelOrbis that this supplier had two available cargoes left with June shipment terms. As a result, SteelOrbis has revised down its ex-UK/EU scrap prices by $2/mt on the upper end to $386-390/mt CFR.
Due to the increasing pressure on deep sea scrap prices after the recent deals, SteelOrbis has revised its ex-US scrap reference prices to $395-397/mt CFR, softening by $2/mt in the absence of any confirmed ex-US deals.
Despite the recent drops observed in the deep sea scrap segment, many market sources are not convinced that the downtrend can be sustained. On the EU side, export yards’ collection prices have moved down by €10/mt week on week to €285/mt DAP, sources report. The higher availability in the EU is the result of the slow performance of the manufacturing sector as well as the warmer weather. The euro-US dollar exchange rate is still standing at 1.156, indicating some stability. The impact of the deal reached in the Iran war has been not reflected in freight rates yet, while market sources believe this will take a couple of more weeks.
As BBC reported today: “Donald Trump may decide to release a preliminary deal to end the war with Iran before Friday, US Vice-President JD Vance says, after the US president said the agreement had already been signed. Vance has described the memorandum of understanding (MOU) between the US and Iran as ‘about a page and a half’ and a ‘very general’ document.”
SteelOrbis hears that ex-US scrap suppliers are not in a rush to sell and are not offering aggressive prices to Turkey. “Most US-based suppliers asked for $400/mt CFR and above last week. The subsequent declines in the EU were mostly caused by the biggest suppliers. I can relate to that as they have the capacity to adjust in terms of price in each deal. The others, not so much,” a source at a Turkish producer commented today. A US source, meanwhile, indicated that the local US scrap market is remaining firm, adding, “Some producers here have started to talk about a potential price increase in August.”
As SteelOrbis previously reported, a recent development that could help bolster prices for prime grades even more in the local US scrap market is the exemption by the US Trade Representative of Brazilian pig iron from the list of products that avoid import tariffs in the US, possibly resulting in 25 percent duty for the material in question.
