Turkish mills have had to increase their deep sea scrap prices slightly after failing to find suitable cargoes for October shipment. Over the past week, deep sea scrap sellers had been rejecting Turkish mills’ bids at low levels of around $325-330/mt CFR, citing their collection costs and weak profitability.
SteelOrbis has learned that an ex-Netherlands deal has been closed by an Izmir-based steel producer for HMS I/II 80:20 scrap at $333/mt CFR, $5/mt higher than the previous level for ex-UK/EU scrap. As European export yards have failed to reduce their collection prices, an upward push on prices by suppliers was inevitable. A German-based sub-collector mentioned that it sold some scrap to Belgium at €230/mt DAP, while another sub-collector in Germany said it is impossible for scrap flow to be sustained at such price levels. SteelOrbis has learned that scrap collection prices at EU-based export yards are currently in the range of €235-240/mt DAP once again. With the euro-dollar exchange rate at 1.17, another slight increase in ex-EU scrap prices may be achieved, market sources report.
Meanwhile, an ex-US scrap booking by a Marmara-based producer has been made at $340/mt CFR, $4.5/mt higher than the previous level. As a result, the $7/mt gap between ex-UK/EU and ex-US scrap has been maintained. The slower flow of HMS grades to US-based export yards has provided support for US sellers.
Turkey’s scrap requirements for October shipments have almost been completed, if not already fully met, though the changes in the inward processing regime in Turkey may cause Turkish mills to increase their purchases in the foreseeable future. On the other hand, Turkish mills’ recent rebar sales in their local market are done with tight margins. According to a source at one producer, “Despite the livelier demand in the market this week, we cannot say the sales made money for us.” Meanwhile, a scrap supplier, reading the situation differently, commented, “Their billet and rebar sales have accelerated. Therefore, they will need more scrap, which we do not have to rush to sell.” Some market sources think the final deals for October shipment will be done during the IREPAS meeting in Munich on September 28-30, while others think bookings for November will also start during the event. “No price decline is expected as we have hit the bottom and price trend has already turned upwards. We shall wait and see if this new $333-340/mt CFR range is a step up or a pitstop.” SteelOrbis considers that Turkey’s import scrap prices have found some fundamental support from the cost and supply side, though no sharp movements in prices are expected in the short term.