As anticipated by SteelOrbis, the upward trend of Turkey’s import scrap market has continued in new deals. Amid higher freight rates both from the EU and the US and also slower scrap flow to export yards, scrap suppliers increased their sales prices given Turkish mills’ continuing appetite for scrap. However, finished steel prices are not providing support, with steel product buyers not interested in higher prices.
SteelOrbis has learned that an Izmir-based Turkish steel producer has concluded a deal from the Netherlands for HMS I/II 80:20 scrap at $344/mt CFR. The same buyer also bought an ex-Germany cargo with HMS I/II 80:20 scrap standing at $346/mt CFR. According to these deals, ex-UK scrap prices are estimated at around $342/mt CFR Turkey. As a result, SteelOrbis has revised its ex-UK/EU HMS I/II 80:20 scrap reference price to $342-343/mt CFR, up $4/mt.
Accordingly, the ex-US benchmark HMS I/II 80:20 scrap price has now increased to $350-351/mt CFR, up by $2/mt, against a backdrop of no new deals. The above ex-Europe bookings have pushed the ex-Baltic reference price up to $348-350/mt CFR Turkey, with a rise of $2/mt.
Germany-based sub-collectors mention that domestic scrap purchase prices after EU-based mills’ adjustments are still more attractive. “In particular, for the higher grades such as E3, we see a significant price advantage in the local market. Hence, we are keeping higher grades for local buyers. For E3, considered a bonus grade, domestic mills are paying €295/mt delivered, while the same grade is bought at around €265/mt at export ports,” a German sub-collector reported. Another German sub-collector said they are now receiving bids from export yards at around €248/mt DAP for HMS I/II 70:30 scrap. “With the freight from the EU increasing to $35-40/mt to Turkey, most of the price increase is lost to sea vessels,” a European scrap supplier added. “The same can be seen in the US as US tariffs are having a significant impact on the number of vessels at US ports. We hear there is a real struggle in the US as they try to find available vessels for Turkey,” another scrap supplier commented. As freight is narrowing the profit margins of sellers, forcing them to ask higher price levels from Turkish mills, it is also observed that scrap flow to export yards is negatively impacted by the more attractive prices in the scrap supplier regions. However, some market sources believe that the recent price increase in the deep sea scrap segment has reached its peak. “We do not see any support from finished steel, no improvement on the Chinese side, while hot rolled coil (HRC) and rebar prices are not following scrap’s example. So, even though EU scrap prices are now at around $345/mt CFR, pushing ex-US above $350/mt CFR, this may be the highest point,” a European scrap supplier said.
Meanwhile, Turkish rebar prices have moved up over the past week. The workable levels in the local market are at $540-555/mt ex-works, with only small amounts traded at $560/mt ex-works. The workable levels for Turkish rebar exports are in the range of $540-550/mt FOB. Turkish mills report that their exports are in danger from the new safeguard system proposed by the European Commission. “Not only are our sales to the EU in danger, but, due to the current protectionism in the international steel market, our other potential markets such as Egypt are also taking measures or announcing that they may take more steps to protect their own steel industries. This means our markets other than the EU may also close their doors to us,” a source at a major Turkish mill said. A source at another Turkish mill said freight will be the determining factor for the deep sea scrap price trend, commenting, “I think freight will be corrected in the coming weeks and then deep sea scrap prices will decline to $340-347/mt CFR” Market sources believe that the upward movement in the freight segment has now ceased, but that it will take two weeks for it to soften to levels that can impact CFR Turkey-based prices. Turkey’s construction season is now finished with the weather getting colder. Today, October 9, Turkey's Kardemir opened its rebar sales at $560/mt, excluding VAT, while it closed them after a couple of hours after selling approximately 15,000 mt. The price indicated a $16/mt increase, compared to its previous price list dated Wednesday, September 17.