As Turkish mills are failing to conclude finished steel sales to their local and export markets, sentiment in Turkey’s import scrap market has failed to stabilize. Although some scrap suppliers are reporting there are alternative destinations where buyers are willing to pay higher levels as compared to Turkey, Turkish mills’ appetite for scrap is still on the low side and they are seeking lower quotations each day.
Alternative destinations are active for deep sea cargo purchases. A major European scrap supplier reports that Pakistan has returned to the market after two years and their sales there for the equivalent of HMS I/II 80:20 to Turkey have been closed in the mid-to-upper $440s/mt CFR levels. SteelOrbis has learned that an ex-Baltic deal was sold to Vietnam yesterday, June 14, for 20,000 mt of HMS I/II 80:20 scrap at $420/mt CFR and 8,000 mt of bonus grade scrap at $435/mt CFR, for July shipment. More sales are known to have been made to various destinations and are giving some room for sellers to breathe.
However, this does not change the main problem in the market. Turkish mills’ high-priced raw material inventories are making it hard for them to lower their finished steel quotations. Having monitored the international scrap market closely, finished steel buyers believe that Turkish finished steel prices, particularly rebar, are unacceptably high. Therefore, demand for rebar is not lively in the domestic and export markets. Even the flat steel market is feeling significant pressure due to the in-hand slab inventories and slow demand. “It is unlikely for finished steel to be sold in significant tonnages before the scrap market stabilizes”, a source commented. Russian billet in the range of $580-600/mt CFR Turkey is also exerting negative pressure on scrap quotations.
A SteelOrbis contact stated, “Right now, the downward pressure continues. We will see what happens when Turkish mills return to buy scrap in full force. Since the holiday season is approaching and due to the 70 percent slowdown observed in the scrap flow to European export yards, I am not sure what they will find when they return.” A seller said that the situation is still bad in the Turkish steel market, noting, “Without Turkish mills selling some steel, we can see another fall in prices.” Having said that, it is also important that there are major sellers who are resisting the $370s/mt bids from Turkish producers, citing their own inventory costs and the lively demand received from alternative markets. Under the current circumstances, Turkey’s import scrap market has become vulnerable to speculative rumors and it is best for players to maintain a cautious stance, SteelOrbis believes.
Meanwhile, SteelOrbis has learned that an ex-Israel cargo has been sold to Turkey for HMS I/II 75:25 scrap at $355/mt CFR. Romanian HMS I/II 80:20 scrap prices remain stable at $360-365/mt CFR. Additionally, due to the absence of new deals, SteelOrbis’ reference prices for benchmark HMS I/II 80:20 scrap prices still stand at $380-400/mt CFR.
