Turkey’s resistance to buy deep sea cargoes despite the ongoing slump in prices has caused another downward movement in the market. Market sources try to understand whether this new range is the bottom, though a clear market consensus has yet to emerge as SteelOrbis understands. Turkish mills, being happier with the most recent levels, are still giving impression of a cautious stance, while several sellers believe that lower levels for the deep sea scrap cargoes are unachievable.
One of Turkey’s Marmara based producers has concluded two ex-UK/EU and ex-Baltic cargoes this week. One of them is from the UK with the HMS I/II 80:20 scrap prices at $369/mt CFR, the other was from Finland with the HMS I/II 80:20 scrap at $373/mt CFR. This mill has been out of the market for a long time, citing its lower need for scrap amid the sluggish steel sales of the producer. SteelOrbis has revised its reference prices for both regions to $369-370/mt CFR and $373/mt CFR, cutting them by 2.05 percent and 2.61 percent, respectively.
Meanwhile, a rumor of an Iskenderun-based producer closing an ex-US deal has surfaced the market yesterday. The cargo consisted of full premium grade scrap, SteelOrbis understood. Market sources reported that the shredded scrap price was $406/mt CFR, bonus grade scrap prices were at $400/mt CFR, while others mentioned the average price of this cargo was $395/mt CFR signaling $375/mt CFR for the benchmark HMS I/II 80:20 scrap. Although some sources believe that this deal was closed 15 days ago at a higher level, others mention that this is a new one. Due to the uncertainty surrounding the market about this deal, SteelOrbis revised its prices for the US originated HMS I/II 80:20 scrap to $376-379/mt CFR. The reasoning behind the price fall was the correlation between ex-US and ex-Scandinavian material.
Steel demand in Turkey has not recovered much over the past week. Turkish longs producers continue to feel the pressure on their local and export prices coming from generally insufficient demand. And while domestically the mills are trying to maintain the prices relatively stable, hoping that import scrap prices will hit the bottom soon and that rebar sales will be slightly better in the new month, as regards exports the situation remains unsatisfactory. The general workable rebar price range in the domestic market in Turkey varies at $568-585/mt ex-works depending on the region. It indicates a $5/mt decrease on the higher end over the past week, while last week prices down to $565/mt ex-works were considered workable in the Izmir region. Initial ex-Turkey rebar export offers for July and early August shipments are standing at $570-580/mt FOB, down by $10/mt from late last month.
Trading activity in Turkey’s billet market is at a standstill with both buyers and sellers being reluctant to spur trade. Local billet sellers in Turkey are not keen on sales now, seeing a slight improvement in rebar list prices to $570-590/mt ex-works and slightly higher, while the situation in the import scrap segment is still uninspiring. In the domestic market, billet prices in Turkey have settled at $535-545/mt ex-works depending on the supplier, with buyers’ bids mainly standing at $530-534/mt ex-works in the Izmir region and at $532-537/mt ex-works in the Iskenderun area. Import billet offers from China have been mainly reported at $515-518/mt CFR Turkey for shipments in September, down $2-3/mt since the end of last week.
SteelOrbis believes that a further decline in deep sea scrap prices is possible as Turkish mills are preparing for a long summer with a weak demand. However, the remaining room for a decline is not a big one as euro appreciated this week and is not leaving much room anymore for European scrap sellers to consider lowering their prices much. It should be noted that several European steel producers are planning to leave the market earlier this summer or are planning a longer holiday period, reducing their scrap inflow. Meanwhile, the pressure on the US side is increasing. US East Coast suppliers have reduced their collection prices by $10/mt this week as SteelOrbis previously reported. The price of HMS I at the New York (NY) and Philadelphia docks fell by $10/gt to $260-270/gt delivered export yard, while P&S 5ft dropped by $280-290/gt delivered. Shredder feed remained unchanged at $220-225/gt delivered. Also, SteelOrbis hears that several available cargoes can be found still from the US East Coast, though sellers are trying to keep their offers somewhat firm.
