As the number of sellers in the market increases, the declining trend of prices in Turkey’s import scrap market has been gaining momentum.
An ex-Estonia scrap deal was done by a Marmara-based Turkish mill, with the HMS I/II 80:20 scrap price standing at $363/mt CFR. This price indicates another sharp fall from the $370-375/mt CFR levels estimated after the ex-US scrap booking announced yesterday, September 7.
As sentiment in the Turkish scrap market remains negative, the number of sellers willing to accept lower prices is rising, though it cannot be said that mills and sellers are on the same page. One Turkish steelmaker said, “In negotiations, the prices in the minds of the two sides are very different.” Turkish mills are targeting $350/mt and below, while the sellers are not willing for now to accept such levels. While scrap sellers are showing resistance to the mills’ desired price levels for scrap, it remains to be seen how long they can hold their ground.
On the other hand, $363/mt CFR from the Baltic region signals a range of $350-355/mt CFR for ex-EU HMS I/II 80:20 scrap. An official at another Turkish producer said he thinks that billet is once again a logical alternative for scrap. SteelOrbis’ reference price for ex-Russia billet has dropped to $520-530/mt FOB Black Sea.
SteelOrbis also observes that scrap collection prices in the EU have been pushed down by export yards, by at least €10-15/mt to €310s/mt DAP Amsterdam and below. Collection prices are expected to remain under pressure in the coming days. US-based sources close to SteelOrbis say that previous expectations of sideways pricing are now “gone with the wind.” US mills will try to bring prices down in September. The first indications are varied but all reflect downward pressure from US-based mills. “Currently, Turkey’s capacity utilization rate is at around 50.8 percent,” an official at a Turkish steelmaker commented, while it is thought that the percentage could decline further.