Turkish mills have started to accelerate their deep sea scrap purchases after ex-US prices were heard at $355/mt CFR earlier this week. New deals show that prices are stable and that they may have hit the bottom for premium grades.
SteelOrbis has learned that a Marmara-based Turkish mill has concluded a deal from the Baltic region for HMS I/II 80:20 scrap at $354.5/mt CFR. SteelOrbis’ ex-Baltic reference scrap price has increased by $1.5/mt with this booking.
An Iskenderun-based producer concluded an ex-US transaction two days ago, with the HMS I/II 80:20 scrap price at $354.5/mt CFR. Half of the cargo’s tonnage consists of HMS I/II 80:20 scrap and shipment is for the second half of August. This price level is similar to the existing SteelOrbis reference price at $355/mt CFR.
Another ex-US cargo has been bought by a producer in Izmir, again with HMS I/II 80:20 scrap at $355/mt CFR. The cargo consists of shredded scrap priced at $375/mt CFR. While the shipment term is not confirmed by the buyer or the seller, it believed to be for the first half of August.
Under the current circumstances, Turkish mills may be said to prefer levels of around $354-355/mt CFR for ex-US and ex-Baltic scrap. They still need deep sea cargoes for August shipment and next week is expected to be livelier than the current one. On the other hand, the local Turkish rebar market has not rebounded. While there was some hope of tonnages changing hands after the Turkish Central Bank’s interest rate hike, domestic rebar traders report that the movement of the Turkish lira-US dollar exchange rate is slow, not giving them much hope. “Demand coming out of construction sites is also slowing. We hear payment problems for constructors carrying out public projects. If no new public investments are announced ahead of the local elections to be held in March, I do not see why prices would recover in the last quarter. It is best to trade back-to-back,” a Marmara-based trader commented.
Meanwhile, Turkey’s short sea scrap prices are under major stress. Ex-Romania HMS I/II 80:20 scrap prices are now at around $325/mt CFR, declining rapidly as compared to the levels recorded at the end of last week. Since yesterday, July 20, another $2.5/mt drop has been seen in short sea quotations. While sellers are not so willing to sell at this price, the pressure on the short sea side is expected to continue in the coming period since deep sea scrap cargoes are financially more attractive to Turkish mills now.