Turkey’s import scrap market has indicated a further decline, especially for ex-Europe scrap prices. However, market sources report that the number of offers available currently is high. Some possible feeling of panic among sellers may push prices down further, while several players have said a stabilization of prices would be for the best. For now, SteelOrbis hears that sellers are showing resistance to lower bids.
An ex-Belgium deal has been closed by an Iskenderun-based steel producer for HMS I/II 80:20 scrap at $338/mt CFR, with shredded and bonus grade scrap at $360/mt CFR. The cargo will be shipped in the first half of February. This price is $2-3/mt lower than the estimations done for ex-EU HMS I/II 80:20 scrap after the ex-US deal confirmed earlier this week. An ex-Netherlands booking has also been done by a Marmara-based mill for HMS I/II 80:20 scrap at $337.5/mt CFR.
Meanwhile, the ex-US HMS I/II 80:20 scrap price has almost remained stable in a new deal closed by an Iskenderun-based steel producer for HMS I/II 80:20 scrap at $345/mt CFR and shredded scrap at $365/mt CFR. Sources believe that the cargo will be shipped in February. This transaction indicates a mere $1/mt decline for ex-US scrap.
Several market sources, including both sellers and buyers, have voiced their expectation of a price stabilization after the abovementioned deals, while some consider a slight decline possible. No source voiced expectations for an upward movement before Turkish mills start to sign contracts for cargoes to be shipped in the second half of February. A source at one major steel mill commented, “A further decline in scrap would not help the sellers, nor us either. It would cause a standstill in the local long steel market, which is already underperforming. We do not see any positive economic development globally to support an upward movement in scrap prices.” A second source at another major Turkish steel producer stated, “Maybe a small decline may be seen if sellers panic, though I believe it would be healthier if scrap prices keep their current levels. It will depend on the Europeans’ next move, their collection prices and the euro-dollar exchange rate. We observe that domestic scrap demand in the EU is on the low side and is not helping their export quotations.” A European scrap supplier said Turkey has some more room for January shipments, adding, “I believe they [Turkish steelmakers] need more cargoes to be shipped in January, which are hard to find at this point. Therefore, demand and offers are almost balanced. For the cargoes to be shipped in early February, I believe today’s prices will remain workable.” This contact admitted that there are higher than usual tonnages of shredded and bonus grade in the EU, while indicating that the lower consumption in the region is causing these tonnages to flow to export yards. Another scrap supplier said the price trend will be determined by the sellers’ strategies, adding, “There are too many offers in the market. Understandably, buyers are trying to reduce prices against such a picture. In this round of bookings, the Turkish mills seem to be more restrained.” Another scrap supplier stated that almost everyone has a cargo that can be offered to Turkey. He went on to say, “It would exert pressure on prices, such availability. However, collection prices in the EU are still at €285/mt DAP. The bottom will be determined by European scrap suppliers’ collection costs and the exchange rate.” A German scrap cub-collector confirmed €285/mt DAP for their most recent sale to an Amsterdam-based yard, though also adding that this level may not be accepted by exporters in the coming days. “They are seeking lower prices for the future,” he added. Billet prices are also monitored closely by all players, with some even saying another $20/mt drop in import billet offers in Turkey would once again make billet a good alternative for scrap. “Kardemir opened billet prices today at $490/mt and sold a high tonnage. Right now, scrap as compared to Kardemir’s billet quotations is more attractive to steel producers,” a source added.