Turkey’s import scrap market has made a quiet start to the current week amid the uncertainties regarding the China’s real estate giant Evergrande as it also waits for US FED’s and Turkish Central Banks’ consecutive announcements. The market still remains silent.
Turkey has concluded high number of deep sea scrap purchases over the past two weeks, hence mills are in no rush to buy more deep sea cargoes. Turkey needs as much as 5-10 deep sea cargoes for October shipments and is not desperate to make a move as of today, September 23. Considering Turkish producers’ recent tendency to leave some cargoes left for prompt shipments, Turkish mills may try to exert more pressure on quotations by staying away. On the other side, scrap suppliers are also in no rush and unwilling to accept lower bids. For now, SteelOrbis’ estimation for HMS I/II 80:20 scrap is still standing at $434/mt CFR on average. Market sources believe that $435s/mt CFR can be workable for premium grades in the coming days, which still supplies a healthy spread for rebars which are currently priced at $670-680/mt FOB.
With China returning to the market with positive price trends and Evergrande settling a bound coupon payment, the depressing impact has decreased. A global steelmaker states that no global expansion of this crisis is foreseen for now because “Chinese will control this”. Meanwhile, a major European supplier states that “players are monitoring Evergrande but maybe we shall look at closer factors such as blast furnaces’ increased usage of scrap due to carbon emission measures which is more relevant to scrap prices.” There is still demand from Southeast Asian countries and Indian subcontinent for containerized prime grades such as new scrap and bonus, SteelOrbis understands. On the other hand, a Turkish mill states that there is no demand for deep sea scrap right now, hence “if someone is in need to sell, they may be forced to accept $430s/mt CFR.”
Following the FED announcement along with Turkish Central Bank’s decision to cut interest rates by 100bp to 18 percent, the mood in the local Turkish rebar market is now pessimistic. $10-15/mt of a decrease on dollar based quotations for domestic rebar is expected by some traders, some even state that there is no demand, “the week can be considered closed”. Having said that the lack of thin dimensions is still felt in the local Turkish rebar market. SteelOrbis has also learned that Yesilyurt will offer rebar locally in the coming days after a long absence in the market.