Turkey’s ex-EU scrap procurement prices have recovered in a new deal closed earlier this week.
SteelOrbis has learned that an Iskenderun-based producer has concluded a deal from Germany with 27,000 mt of HMS I/II 75:25 scrap at $372/mt CFR and 3,000 mt of bonus grade scrap at $397/mt CFR. According to this information, ex-EU HMS I/II 80:20 scrap is now at $377/mt CFR, increasing by $7.5/mt as compared to the previous deal from Belgium earlier this week. Some market sources stated that the price levels in the bookings can be considered similar since both have special circumstances, though this information has not been confirmed by the buyer or seller.
In general, Turkey’s import scrap market is very pessimistic. The lack of finished steel exports and the low volumes of steel changing hand in the local market is creating difficulties for Turkish producers. Many mills stated that financial issues are worsening with each day. Meanwhile, a source at one producer said, “We need to be very cautious to maintain our cash flow and financial stability. If things continue like this, another cut in production rates or even stoppages are unavoidable.” A contact from another producer said, “Since our nearest competition offers steel to our markets at a price $30/mt lower, exports should not be expected to recover.” Another steelmaker commented, “Our customers are also experiencing difficulties accessing money. When they cannot draw goods, they order and make payment. We cannot do the same for scrap cargoes. Hence, we are all careful and are in no rush to conclude deep sea bookings.” Meanwhile, one major EU-based scrap supplier was not pessimistic. According to this source, “Europe provides two thirds of the scrap Turkey is buying. Therefore, considering the deficit of supply in relation to demand, European scrap prices will remain firm.” Also, some alternative markets in the Indian sub-continent are seeking cargoes, SteelOrbis understands. A Baltic scrap supplier said that prices have not much room to go down and he expects a fluctuation in the range of $370-385/mt CFR. An ex-US and ex-EU scrap supplier both also said that European scrap collection prices will not allow sellers to lower their prices in July, pointing out that Turkey will be in the market for scrap next week for the shipment in the first half of August. A US scrap supplier said there is interest in scrap in the market, “If offers were at around $375/mt CFR for the US, finding a buyer would not be hard,” he said.
In the short sea segment, ex-Romanian HMS I/II 80:20 scrap sales have been done in the range of $347-350/mt CFR. An Iskenderun-based producer has also bought ex-Israel HMSI/II75:25 scrap at $340/mt CIF. Short sea scrap suppliers feel the downward pressure more than others. A contact from one producer said, “Procuring short sea scrap now is disadvantageous. We prefer deep sea because it is easier financially.”