As older scrap deals continue to surface in Turkey’s import scrap market, deep sea scrap prices decline with each new deal. The negative mood in the market has not changed since the beginning of the week, but is rather intensifying due to the approaching presidential and parliamentary elections to be held in Turkey on May 14.
SteelOrbis has learned that an ex-Sweden deal was closed by a Marmara-based producer last week for HMS I/II 80:20 scrap at $415/mt CFR, shredded scrap at $435/mt CFR and P&S grade scrap at $435/mt CFR. This level is similar to that in a booking reported by SteelOrbis yesterday, April 24.
An ex-US scrap deal was also closed on April 20 by an Izmir-based steelmaker for HMS I/II 80:20 scrap at $415/mt CFR and shredded scrap at $435/mt CFR. As a result, ex-US scrap prices declined by $2.5/mt.
While scrap suppliers in the US and the Baltic region are willing to accept $410s/mt CFR today, April 25, Turkish buyers have started to aim for closer to $400s/mt CFR. “European suppliers cannot cut their prices to $405s/mt CFR due to their collection quotations, and so they are also offering at $410s/mt CFR,” a supplier reported. Turkey is estimated to have bought 20-25 cargoes for May shipments, with details regarding the deals being kept confidential, while five to six deep sea cargoes are expected to be transacted before the current month ends. The number of deep sea scrap offers to Turkey now exceeds the needs for May shipments. Since China is exerting a negative pressure on the international steel market, the mood in Turkey is pessimistic for the future trend of prices and for trading activity. Another issue widely talked about is the Turkish lira-US dollar exchange rate. Some players report that the exchange rate they are offered is higher than the official rate. This is creating great uncertainty, not just for the scrap segment but for all segments. “The cash flow problem is felt strongly in the market,” one source said today, with several sources from all sides agreeing. While there are no new developments regarding the earthquake-hit regions in Turkey in terms of construction and rebuilding efforts, SteelOrbis hears that local scrap generation in the region is very good. Iskenderun-based mills are mainly working with domestic scrap and are exerting extra pressure on import scrap prices. As the elections approach, trading in Turkey is expected to continue to slow down gradually. Therefore, the pressure on the deep sea scrap segment is building up amid the lack of alternative markets for suppliers.
An ex-Romania booking has been done by an Izmir-based producer for 4,000-5,000 mt of HMS I/II 80:20 at $370/mt CFR. While demand remains sluggish for short sea scrap, suppliers are feeling a build-up of financial pressure. The number of offers coming out of the Black Sea region has increased, though not all negotiations are resulting in actual deals. Some Romanian suppliers state they are finding opportunities in their own market at $360s/mt delivered to mill.