While earlier this week the main question in Turkey’s import scrap market was whether higher price levels would be accepted, the question has been answered today, May 16. Turkish mills have concluded deals from the EU and the US in which deep sea scrap prices have moved down. The lower end of the price range, represented by ex-EU HMS I/II 80:20 scrap, is now back at the level recorded in early March this year.
SteelOrbis has learned that an ex-US booking was done by an Iskenderun-based producer for HMS I/II 80:20 scrap at $380/mt CFR and shredded and bonus grade scrap at $400/mt CFR. The cargo will be shipped in the second half of June. This price is $3/mt lower than the previous deal done from this region.
An ex-Netherlands booking was also done by an Izmir-based producer, with HMS I/II 80:20 scrap standing at $375/mt CFR. This deal also means ex-EU scrap prices have declined by $5/mt from the previous ex-Germany booking disclosed early this week. The ex-Netherlands transaction has not been confirmed by the buyer or the seller by the time of publication, though most market players said they believed the booking had been done.
While another ex-EU scrap booking is rumored to have been closed at $377/mt CFR Turkey for HMS I/II 80:20 scrap, the wrong buyer was indicated in the market and the price was not confirmed by the time of publication. Having said that, SteelOrbis has learned that a major European scrap supplier is now targeting $380/mt CFR and above for future cargoes for Turkey. SteelOrbis will revise its ex-EU scrap price to $375/mt CFR amid the lack of information about higher levels being fixed in deals.
On the other and, Italian scrap prices to Turkey have been recorded at around $369-371/mt CFR Turkey, with ex-Greece scrap deals closed at around $355-367/mt CFR, both for HMS I/II 80:20 scrap. SteelOrbis hears that ex-Romania scrap suppliers are asking for $365/mt CFR and above, but bids received from Turkey are in the range of $350-355/mt CFR. Under these circumstances, the workable levels for Romanian HMS I/II 80:20 scrap are at around $360/mt CFR.
Turkey still needs at least 15 deep sea scrap cargoes to be shipped in June, market sources agree. Therefore, next week is expected to be a lively one in terms of scrap transactions. “If Turkish mills do not decide to stop or cut production, they have to buy these cargoes,” a seller of ex-EU and ex-US scrap commented today. Another trading company selling from the same regions said there will be an upward price movement next week. No official production cut announcement has been made by major Turkish mills yet, also supporting the idea Turkey’s deep sea cargo needs will not change in the short term. However, Turkish mills’ steel sales performance is still on the low side. “No change has been observed in the local rebar market,” a trader commented, adding, “Instead, the situation is becoming dire. Traditionally, the current months should have been the busy season for the Turkish rebar market, with the start of the construction season. However, the economic crisis we are experiencing results in silence.” Turkish long steel mills are going through challenging times and have switched their targeted export destinations mostly to eastern Europe, in particular Romania and Bulgaria, while the new EU quota period will begin on July 1 but most inquiries are for June shipment. Currently, ex-Turkey rebar offers are at $585-600/mt FOB for late May-June shipments, falling by $5/mt on the lower end. Last week, the sale of a small rebar lot to Latvia was done at $580/mt FOB and 10,000-12,000 mt was sold to Jamaica at $585/mt FOB. Today, 12 mm rebar spot prices in Turkey have settled at TRY 22,600-23,500/mt or $585-608/mt ex-warehouse, depending on the region, with an exchange rate of $1 = TRY 32.20. The workable rebar prices in the Izmir and Marmara regions vary at $585-605/mt ex-works for serious buyers, SteelOrbis has heard.