Over the past week, Turkey’s import scrap market has recorded a gradual decline in deep sea scrap prices. Turkish mills were trying to digest the latest price increases, taking a breather after concluding many deals a week ago, having been relatively successful in their goal to lower quotations.
SteelOrbis has learned that earlier last week an ex-US scrap deal was closed by an Izmir-based mill for HMS I/II 80:20 scrap at $416/mt CFR, $6/mt lower than the previously confirmed US origin booking. However, later last week, another US-based seller signed a contract with a producer in the Marmara region, on January 13, with HMS I/II 80:20 scrap standing at $413.5/mt CFR. The cargoes are to be shipped in February. As a result, ex-US benchmark HMS I/II 80:20 scrap prices have declined by $8.5/mt in total.
A similar trend has been observed for ex-EU scrap. Early last week, an ex-Manheim deal was done by a Karabuk-based steelmaker for HMS I/II 80:20 at $414/mt CFR and bonus grade at $434/mt CFR. Some market players think that the higher grade is shredded and the booking is believed to have been done on Thursday, January 12. Another ex-Amsterdam deal is reported to have been closed at $408/mt CFR Turkey, though the details of this deal have not been disclosed at the time of publication. The most recent ex-UK booking closed at $400/mt CFR for HMS I/II 80:20 was done on Friday, January 13, for February shipment. The total tonnage is 22,000 mt. As a result, ex-Europe scrap prices have declined gradually from an average of $412/mt CFR to $400/mt CFR.
An ex-Poland deal, again from last week, was signed by an Iskenderun-based producer with HMS I/II 80:20 scrap at $414/mt CFR. Previously, the ex-Baltic benchmark price was at $418/mt on average. Considering the most recent ex-US deal at $413.5/mt CFR, ex-Baltic prices in the coming deals are expected to be closed at lower levels.
The general idea in the market is for European HMS I/II 80:20 scrap to stand at $400-405/mt CFR Turkey and for ex-US scrap of same grade at $405-410/mt CFR. “Some sellers with stronger financials can lower their prices more easily, but let us remember that smaller scrap suppliers have already sold their cargoes and are in no rush,” a source commented. “Steelmakers are trying to cover their gaps in deliveries in this round of bookings, while flat steel quotations are showing some kind of recovering but rebar is still dependant on local demand. It is not performing well. In the short term, a recovery in Turkey’s steel demand is not expected, especially with the current energy prices,” another market player said. In general, a collapse in prices is not expected in Turkey. On the contrary, SteelOrbis observes that there is some hope for March. A German sub-collector reported that their most recent sales to Amsterdam were done at €345/mt DAP for HMS I/II 70:30, while sales to Belgium of HMS I/II 70:30 scrap, HMS I/II 80:20 scrap and E3 grade scrap were done at €337/mt DAP, €347/mt DAP and €357/mt DAP, respectively, all closed last week. However, export yards have reduced their bids since then to €320-330/mt DAP Amsterdam. Positive sentiment is observed in the overall European scrap market, creating competition for Turkey if mills continue to buy scrap. SteelOrbis believes the deep sea scrap market has reached a balance for now and this week may be a silent one.
Meanwhile, the HMS I/II 80:20 scrap price range from Bulgaria and Romania has also moved down step by step in new deals. The upper end of the price range at $405/mt CFR was maintained last week, but there were also deals closed at lower levels. From Bulgaria, HMS I/II 80:20 scrap was sold at $395/mt CFR at first, while another ex-Romania scrap deal was done at the same level. But later last week, an ex-Romania cargo with 2,000 mt of HMS I/II 80:20 scrap was sold at $391/mt CFR. As a result, the short sea HMS I/II 80:20 scrap price has been revised to $390-395/mt CFR from $400-405/mt CFR. Market players think that short sea sellers are in no rush to conclude sales and there is no panic among sellers. “The price is mainly determined by the positions of buyers and sellers. For prompt shipments, Turkish mills are willing to pay higher levels,” a seller commented.
