Turkish mills have continued to achieve lower deep sea scrap prices in each new deal, with ex-US scrap price moving closer to $340/mt CFR, increasing the pressure on European scrap sellers. The euro’s depreciation against the US dollar is not helping the price situation, though the tonnages available from the EU are also increasing despite unchanged collection costs.
SteelOrbis has learned that an ex-US scrap deal has been done by a Marmara-based producer with HMS I/II 80:20 scrap at $342/mt CFR. This level is $3/mt lower than the previously confirmed deal from the US. Another rumor is that a different US-based seller has concluded a sale to Turkey with the HMS I/II 80:20 scrap price at $341/mt CFR. No details are available at the time of publication for the second booking.
Market sources report an ex-Scandinavia deal done by an Iskenderun-based producer, with the HMS I/II 80:20 scrap price in the range of $340-342/mt CFR. While this information has not been confirmed by the buyer or the seller by the time of publication, the price is considered by market players to be acceptable for this grade. “This price also indicates a small decline from another ex-Scandinavia booking done last week at $343/mt CFR,” one source said today, January 13.
Meanwhile, ex-Europe scrap bookings are reported to have been closed in the range of $333-335/mt CFR last week. An ex-Belgium deal was done at $335/mt CFR by an Iskenderun-based producer, with two ex-UK deals done at $333-334/mt CFR by the same buyer last week, SteelOrbis hears. This price range indicates a $3-4/mt decline for ex-Europe HMS I/II 80:20 scrap. According to market sources, three ex-EU cargoes were sent to Egypt last week.
Market sources state that scrap flow in the US and the EU remains on the low side due to the cold weather conditions. “Snow is a significant obstacle for European scrap collectors. The situation is not very different in the US, where the domestic market is paying approximately $30/mt higher for premium grades like shredded. Hence, our collection tonnages at export yards are declining,” a major ex-US scrap seller commented. The same market player said he believed deep sea scrap prices in Turkey are on the verge of a trend change, “I believe prices may recover in the coming days,” he said. Having said that, the availability of premium grades in the EU region may help Turkey to meet its needs. SteelOrbis hears that European scrap sellers have more than traditional volumes of shredded and bonus grade scrap on hand because European mills had left the market earlier than usual in December for the holidays and did not buy the tonnages in question. “Collection prices in the EU are not declining, bids are lower, but scrap flow stops when one cuts prices. We also tried to cut our collection prices in the UK over the past ten days, but failed to do so. Competition is not giving us much room to cut collection costs,” a UK-based exporter commented. The same source said deep sea scrap prices may remain stable for a little longer. “Sellers give the impression that they are willing to continue selling at the current levels. The sideways movement may continue for a while, but Turkey needs a lot of cargoes for February shipment. I think Turkish mills may increase their number of cargoes purchases this week to get ready for March, with the hope of a rebound in finished steel quotations,” this source commented. Another source said Turkey needs at least 20 more deep sea cargoes for February shipment, adding, “Prices may change trend. We are very close to the bottom, if not there already.” While sellers have mostly started to share more positive expectations this week, buyers are still reporting a high number of available cargoes for Turkey and a lack of finished steel demand.