Turkey’s sporadic scrap deals have continued with two bookings from the UK/EU and a possible ex-Baltic deal, reflecting firmer-than-expected market sentiment. While Turkish mills’ appetite for deep sea scrap cargoes has not been so strong this week, they are finding ways to restock gradually and mostly prefer European cargoes. The downward trend of the deep sea scrap market has slowed down and there are signs that the bottom is close, SteelOrbis believes.
One ex-UK deal was done by an Izmir-based Turkish steel producer for HMS I/II 80:20 scrap at $379.5/mt CFR, while another deal from the Netherlands was closed at $380/mt CFR. As a result, ex-UK/EU scrap prices have more or less maintained their levels, bending just very slightly to buyers’ insistence on lower pricees. SteelOrbis has revised its ex-UK/EU scrap reference prices to $379-381/mt CFR, from the previous $380-383/mt CFR levels. The depreciation of the euro against the US dollar has provided some support for European sellers in the current week. Today, June 25, the euro stands at 1.1353 to the dollar. Some European scrap sellers report that the current bids received from Turkish mills at around $380/mt CFR are not acceptable to them. Despite the support from collection costs and the depreciating euro, some sellers do not agree that further price cuts are possible. “Collection at €280/mt DAP is almost impossible. No flow is received at the lower end of the collection bid prices,” a European source said today.
Some German sub-collectors also mentioned that €280/mt DAP is too low to be profitable. “We are transferring tonnages due to our previous commitments, when contracts closed at higher levels. €280/mt DAP is not workable for us, and we are in no rush to reduce our inventories ahead of the summer holidays,” a scrap sub-collector added. Meanwhile, SteelOrbis has learned that the water levels in the Rhine River are dropping amid hot weather conditions, causing inland freight rates to move up.
There is a rumor of an ex-Denmark booking with the HMS I/II 80:20 scrap price standing at $385/mt CFR. While this information was denied by the time of publication, market sources think that the price level in question is workable today. SteelOrbis has revised its ex-Baltic scrap reference price to $385/mt CFR, from the previous $385-388/mt CFR. In the lack of any ex-US deals in the market, this ex-Baltic scrap price is considered indicative due to its premium grade, causing SteelOrbis to drop its prices for this grade to $385-386/mt CFR. “There is no interest from Turkish mills. This period of slowness has been longer than we are used to and is exerting serious pressure on our offers. While some of us can keep their offers at certain levels right now, I am not sure if this relative firmness in offers can be sustained for long,” a seller from the Baltic region said.
While Turkey’s rebar sector has shown no recovery with the summer, it continues to exert pressure on deep sea and short sea scrap prices. The hopes of an acceleration of rebar trading are gradually fading. Ex-Turkey initial rebar export offers for July-early August shipments are standing at $580-590/mt, versus $585-600/mt FOB last week. A few buyers from the Balkans are making firm rebar bids at around $580/mt FOB, which may lead to some deals. However, some sources report that, based on the domestic prices in Turkey with the lower end hovering around $565-575/mt ex-works (including those for cash payments), a few Turkish mills might test $570-575/mt FOB and maybe slightly lower than that depending on the order.
