The negative outlook in the international steel market is taking its toll on Turkey’s import scrap market, with Turkish mills exerting pressure on scrap prices citing their increasing costs and mainly the lack of demand. Following the recent holiday, the expectations of livelier demand for steel have not materialized in Turkey, with the market instead very silent with little trading.
A Canadian supplier is rumoured to have sold HMS I/II 95:5 scrap to Turkey at $380/mt CFR and shredded scrap at $393/mt CFR. The buyer of the cargo has not been disclosed, but SteelOrbis believes that it may have been a Marmara-based producer. This level signals $377/mt CFR for benchmark HMS I/II 80:20 scrap. Meanwhile, market sources report that there are several sellers from the US offering cargoes to Turkey. SteelOrbis understands that Turkish mills are not under pressure in the current conditions.
One scrap supplier commented that $360s/mt CFR may be achieved in the coming period for HMS I/II 80:20 grade, and several suppliers agreed that there is more room for deep sea scrap prices to fall. This level is closer to the Turkish producers’ desired levels at $350-360/mt CFR. “There is not enough demand for scrap. But after one round of bookings, we may see another recovery in the deep sea segment. I believe $380s/mt CFR is more likely since the EU is starting its holidays gradually and scrap flow is slowing down sharply,” another supplier commented. There is one more factor to consider. SteelOrbis hears that scrap flow in the EU is hit by the recent heat wave, which is causing water levels in rivers to fall. “Most vessels also prefer to carry coal instead of scrap. There is a big risk of a gas supply cut by Russia and countries are getting ready by increasing their coal usage,” a source commented. Another source said that water levels are “historically and critically at low levels.” It is also observed that Turkish steelmakers have started to reduce their domestic rebar quotations. Today, July 22, it is heard that there are sales of small tonnages at $670/mt ex-works by a Marmara-based producer, which is now closer to accepting $660s/mt ex-works.
Following the ex-Romania deal done earlier this week for HMS I/II 80:20 scrap at $360-365/mt CFR, no new deals have been heard. However, a Bulgaria-based supplier stated that they estimate the upcoming prices as likely to be at $325/mt CFR for this grade. “We would be happy to achieve $330/mt CFR at the moment. Yesterday, mills refused our offers at $340-350/mt CFR. But we are at the beginning of a deep recession, so if there is any demand we will take the opportunity,” he said. However, another supplier from Romania stated that the price is not seen yet, commenting, “Our principals are not willing to cut their levels in such haste.” Under the current conditions, Turkish mills are expected to find small vessels to gain some time and to be able to exert more pressure on the deep sea segment. Nevertheless, it cannot be said that they have a big appetite for short sea scrap. A supplier trading ex-Mediterranean scrap mentioned that most Iskenderun-based producers have decided to wait before concluding deals, adding, “I think if deep sea settles at $360s/mt CFR, ex-Mediterranean HMS I/II 75:25 scrap will decline to $325-330/mt CFR in the coming round of transactions. This means $330-340/mt CFR for Black Sea scrap.”