As Turkish mills start to seek deep sea cargoes for shipment in December, they have realized that sellers are not in a rush to meet their demand. The market is strictly a seller’s market amid the strong demand received from Turkey, market sources state.
An ex-France cargo sold to a Marmara-based Turkish steel producer late last week indicated that ex-EU scrap prices have reached $350/mt CFR. Another ex-Netherlands cargo was sold at $346/mt CFR to the Izmir region. As a result, SteelOrbis’ reference prices for ex-UK/EU scrap prices are now at $346-350/mt CFR, $2-4.5/mt higher than the previous range, and prices are expected to continue to increase.
Both buyers and sellers stated that Turkish mills’ scrap inventories are on the low side since they have been maintaining a cautious stance for a long time in terms of stock management. “We anticipated that they would need more cargoes if their finished steel sales accelerated. Their sales seem to be going well. On the other hand, some scrap cargoes were postponed due to high freight costs or the lack of vessels, forcing some buyers to find prompt cargoes,” a European scrap seller commented today, November 4. Another European supplier stated, “We see that prices have increased by at least $5/mt and this uptrend will continue as all Turkish mills are seeking cargoes. We cannot see the peak of prices yet, anything can happen, depending on sellers’ attitude.” A source at a Turkish mill agreed, stating, “Each cargo offered to the Turkish market can find a buyer within a minute. It is completely a seller’s market, while we see no urgency on the sellers’ side.” Another source at a Marmara-based steel producer added, “We have been hearing that there are mills that need prompt cargoes, but sellers are very silent as they anticipate an increase in prices. At least a $5/mt increase in prices is expected under the current conditions.” Another market source pointed to Turkish mills’ domestic scrap purchases prices, saying, “They are also paying similar levels to local scrap sellers, which shows that Turkish mills need quick deliveries. On the other hand, deep sea sellers are in no rush to sell for December deliveries, and it is only the beginning of November.”
SteelOrbis hears that collection prices at European exporters’ yards are in the range of €250-255/mt DAP, though the flow to their yards is slow. “There are several factors causing the slow flow of scrap. First, November scrap purchase prices of European mills are expected to be higher. Second, scrap coming from industrial production is lower as demand remains sluggish. Sub-collectors had a bad year and some have even started to focus on non-ferrous instead of steel scrap. European steel producers’ energy costs are expected to rise in the coming period too. A German-based sub-collector stated today that the steel industry in Germany is in a very dire position. “They want to lower prices by €5-10/mt this month, which seems impossible. We want them to increase by €5-10/mt. All sales done recently were closed with some losses on our side. We collect the uncut material at €200/mt delivered to shredder. With the costs on our side, the ex-yard price is at €250/mt, the same as export yards’ purchasing price. So, we are keeping scrap in our yards and waiting for higher price bids from exporters. If their quotations rise to €260-262/mt DAP, they can have faster flow to their export yards.”
In this context, SteelOrbis safely predicts a price increase in Turkey’s import scrap market this week unless a decline is seen in Turkish mills’ finished steel sales or sales prices.