Having completed most of their deep sea scrap purchases last week, Turkish mills’ absence from the import scrap market has caused silence in the current week and resulted in sideways price movement. After the deals disclosed to the market on Monday, August 15, only two older ex-Venezuela deals were shared.
SteelOrbis has learned that the deals were done by the same buyer in Turkey’s Marmara region. The first cargo was done for 23,000 mt of HMS I/II 80:20 scrap at $393/mt CFR, for prompt shipment. This deal was done last week but the details only disclosed later. The same producer is rumoured to have concluded another ex-Venezuela booking for the same grade at $385/mt CFR. No further details have been disclosed about the second deal which was also done last week.
Market players believe that the low trading in Turkey’s import scrap market may continue in the coming week, and so downward pressure is expected in the market. “Everything is going on as anticipated. I believe the market will remain silent next week. Turkish mills will be asking lower levels after the August 30 Victory Day holiday,” a seller commented. Due to the approach of the end of the month, Turkish mills and traders will be focusing on their cash flow. It is the traditional payment period of the month. Accordingly, Turkish mills may reduce their rebar prices in the coming week amid the lack of exports. The decision of Turkey’s Central Bank’s (CBRT) decision to cut interest rates may also support Turkish mills’ export offers for finished steel as the Turkish lira is set to lose some strength against the major currencies. However, the scrap volume in the EU is still problematic. SteelOrbis hears that scrap collection prices in the region are rising. Also, European market intermediaries anticipate a price increase in September, after the holidays. Currently, the collection prices in the UK are in the range of £280-290/mt, confirmed by two suppliers. A major European scrap seller stated that collection prices are very high due to the shortage of scrap. Additionally, demand from alternative markets is still good, supporting sellers. According to a market player, “If Turkish mills do not cut their production significantly or halt production, scrap prices will not have any large space to decrease.”
As a result, SteelOrbis has kept its deep sea scrap reference price stable in the range of $387-397/mt CFR, while noting that there is a tendency towards a softening in the market.
In the short sea segment, two Bulgarian cargoes for HMS I/II 80:20 scrap were sold at $375-376/mt CFR. A Romanian cargo was sold at $377/mt CFR and an ex-Adriatic cargo was bought at $389/mt CFR, both for HMS I/II 80:20 scrap. The deals in question were done late last week or early this week. The previous deals were done in the range of $378-385/mt CFR. “Short sea cargoes are still attractive for mills in the Marmara and Izmir regions, but no demand is coming from Iskenderun-based mills for ex-Mediterranean cargoes,” a seller commented.