In deals done late last week, Turkey’s ex-Europe scrap procurement prices have increased significantly. The fundamentals that are pushing deep sea scrap prices up have not changed since SteelOrbis’ report published last Friday. Scrap demand continues to be observed in Turkey, while supplier regions are standing firm on their prices due to the pace of scrap collection and domestic demand.
SteelOrbis has learned that an Iskenderun-based mill has concluded a deal from the UK for HMS I/II 80:20 scrap at $455/mt CFR, with shredded and bonus grade scrap at $475/mt CFR. The previous ex-UK booking was closed at $445/mt CFR Turkey.
The same mill has concluded another ex-EU deal which is considered to a short sea deal, rumoured to be from France, with the HMS I/II 80:20 scrap price standing at $448/mt CFR.
This particular producer in Iskenderun concluded four transactions last week. In addition to the deals above, another deep sea deal was closed at $450/mt CFR and a short sea deal was done at $468/mt CFR. The origins and the content of those cargoes were not shared, but market sources believe that the short sea deal must have been closed for higher grades.
With the strong signals coming out of the EU, other supplier regions are set to align themselves accordingly. The local US scrap market is expected to settle this week. SteelOrbis’ surveys indicate that it is safe to expect a $20/mt increase for cut grades and $30/mt for shredded grades. Hence, SteelOrbis is increasing its ex-US scrap reference price from the $450/mt CFR fixed in the most recent deal to $460/mt CFR. Accordingly, ex-Baltic scrap prices will rise to the $455-460/mt CFR range. A major scrap seller has commented that the scrap flow to yards is still slow. “Sub-collectors also have some cash in hand and are relaxed. They do not feel much financial pressure,” he added. The same cannot be said for Turkish mills, though, a source said that finding money nowadays is harder for Turkish producers since Turkey’s credit default swap (CDS) is still at high levels.
Also, SteelOrbis has learned that an ex-Israel spot deal for HMS I/II 75:25 scrap was done in Iskenderun late last week at $420/mt CIF. Ex-Romania HMS I/II 80:20 scrap prices are estimated to be at $435-440/mt CFR.
The Turkish steel market is waiting for news from the meeting to be held tomorrow, March 7, between the Turkish authorities, steel mills and contractors. On the other hand, the local rebar market seems to have taken a breather since late last week. A trader commented that everyone has increased their stocks due to the anticipated rebuilding activities in the earthquake region, but demand is not seen yet. “Accordingly, we have taken a step back and want to see what comes out from the meeting,” he added.