Turkey has concluded a scrap booking from the UK at an unchanged price as compared to the level recorded late last week. Market sources report that the supplier, located in the north of the UK, is a new one in the market and that this is their first sale to Turkey.
Bought by an Izmir-based steel producer, the HMS I/II 80:20 scrap price for the cargo was $337.5/mt CFR, with shredded and bonus grades at $357.5/mt CFR. The cargo consists of 20,000 mt of scrap and will be shipped late September-early October. This price level is similar to those recorded late last week for ex-UK cargoes. SteelOrbis’ reference prices for ex-UK/EU scrap prices have dropped to $337.5-339/mt CFR for now, with ex-US HMS I/II 80:20 scrap prices at $343-344/mt CFR.
An Izmir-based producer is reported to have concluded a deal from the Baltic region with the HMS I/II 80:20 scrap price at $338/mt CFR. Another deal from the Baltic region was concluded by an Iskenderun-based producer for HMS I/II 80:20 scrap at $337/mt CFR. As a result, SteelOrbis’ reference price for ex-Baltic HMS I/II 80:20 scrap has been reduced by $5.5/mt to $337-341/mt CFR.
Turkish mills are exerting significant pressure on prices in their bids, sharing bids lower than the $345/mt CFR counter-offers for ex-US scrap. While market players state that this is understandable given Turkish mills’ underperforming steel sales and prices, for now US-based scrap suppliers seem unlikely to accept such levels. “Sea freight from the US East Coast to Turkey is very high and continues to move up. For now, we are maintaining a cautious stance,” a US scrap supplier commented. While prime grade scrap quotations in the US are expected to fall during the September-buy-cycle, HMS prices are not expected to follow suit due to better local demand in the US. In the EU, collection prices have remained at around €250/mt DAP and scrap availability has not recovered yet. When EU-based players return from their holiday in September, European mills are expected to restock with scrap. European mills are also struggling to stay on their feet. Despite market players’ anticipation of lower-than-usual scrap demand from European producers when they return from the summer break, even such demand is expected to provide some support for sub-collectors’ scrap offers as supply remains on the lower side.
Over the past week, official Turkish rebar export offers have declined by $5/mt to $535-545/mt FOB for late September shipments, while a few mills are still testing $550/mt FOB, which seems a bit high under the current market conditions. Sources expect some fruitful negotiations with some of the Balkan-based buyers for the new EU import quota period. The sources report the general workable rebar prices are at $535-550/mt ex-works, stable over the past week, though some tonnage is rumored to have been traded even at $530/mt ex-works in the Izmir region due to the ongoing currency fluctuations.
Under the current circumstances, SteelOrbis expects a soft sideways movement in Turkey’s deep sea scrap market. Unless Turkish mills’ rebar sales improve in the coming period, scrap buyers are expected to maintain their cautious stance and continue to exert pressure on scrap offers. Meanwhile, collection costs and higher freight prices are not allowing much room for negotiations.