Ahead of the short holiday in Turkey during the New Year, a second ex-US booking done this week shows that the firm stance in deep sea scrap market is maintained. While ex-US scrap prices returned to their previous levels with this deal, an accumulating upward potential is clearly seen in Turkey’s deep sea scrap market. Having said that this potential upward movement is limited for now, mostly resulting from the dynamics in the scrap supplier regions and not fully supported by Turkey’s steel market.
An Izmir based producer has concluded the ex-US transaction with HMS I/II 90:10 scrap at $372.5/mt CFR, shredded scrap prices at $390/mt CFR. This price indicates a $369-370/mt CFR level for ex-US HMS I/II 80:20 scrap, moving SteelOrbis’ reference prices up by $3/mt.
Another rumor states that an ex-Baltic deal concluded by a Marmara-based producer was closed at $366/mt CFR for the benchmark HMS I/II 80:20 scrap. This information was not confirmed by the parties at the time of publication, but the price level in question is in line with the abovementioned ex-US booking. As a result, SteelOrbis has increased its ex-Baltic scrap prices by $1/mt.
Expectations regarding the local scrap prices in the EU and the US are still positive for January, which is anticipated to support the exporters’ insistence of higher price levels for Turkey. Following the holidays in the scrap supplier regions, scrap demand is traditionally expected to recover, and sub-collectors inform SteelOrbis that the current collection prices, particularly in the EU-based export yards, are not high enough. While Turkish mills’ rebar sales have slowed down at the end of the year amid seasonal factors, the recent increase in the minimum wage in Turkey will also have an impact on Turkish mills’ costs in the coming months. “Our margins are tightening once again, while we see an upward expectation is there for the upcoming scrap deals,” a source from a major mill commented. When Turkey’s deep sea scrap procurements gain momentum after the holiday season, there will be factors in game that can push deep sea scrap quotations up despite the seasonal slowdown in Turkey’s local steel trading.
