With some relatively older deals disclosed today, June 14, in Turkey’s import scrap market, prices have softened a little. Further price increases now seem harder, according to several market players.
SteelOrbis has learned that a Marmara-based producer concluded a deal from Sweden on Monday, June 12, for HMS I/II 80:20 scrap at $387/mt CFR and bonus grade scrap at $407/mt CFR, for July shipment. This level is $2.5/mt lower than the prices in the previous deal reported on Friday.
Meanwhile, Tata had already closed its first scrap deal late last week. The buyer was an Izmir-based producer, with the cargo consisting of 20,000 mt of HMS I/II 80:20, with the material collected from the UK and the Netherlands. While the price in the deal was not shared by the parties involved, it is said to be at “the market levels.”
An ex-US cargo was closed late last week by an Iskenderun-based producer for 20,000/mt of bonus grade scrap and 10,000 mt of HMS I/II 95:5 scrap at $410/mt CFR. This price indicates that HMS I/II 80:20 scrap quotations were still at $390/mt CFR at the time, though some market players believe now it makes more sense to anticipate some decline for ex-US material too. Taking the ex-Sweden deal above into account, SteelOrbis will cut its ex-US scrap reference prices on the lower end to $387-390/mt CFR.
A fourth cargo from the middle of last week has also been shared today, from Belgium to a Black Sea region-based steelmaker. There was HMS I/II 80:20 scrap priced at $388/mt CFR in the cargo along with bonus and shredded scrap at $411/mt CFR. This level is now considered not to be workable, while SteelOrbis will revise its ex-EU scrap prices to $383-385/mt CFR, reducing them by $3/mt week on week.
The number of sellers in the short sea scrap segment increased late last week, while the workable levels are now in the range of $365-370/mt CFR as compared to the levels recorded last week at $372-375/mt CFR. For ex-Israel HMS I/II 75:25 scrap, the workable levels are at $360/mt CFR, according to one seller, though the normal difference between Romanian and Israeli cargoes is usually $10/mt minimum.
According to some sub-collectors in Germany, collection prices in the EU declined by €10/mt yesterday, June 13. Prices delivered to export yards were at €325-330/mt DAP before this news. These sources have voiced their concerns regarding the holidays, while the price decline in Italy for German scrap is expected to be around €30/mt, as agreed by some Italian sources. On the other hand, a major European scrap supplier stated, “Dockside prices still remain high and elevated at the levels of €325-€330/mt with supply inflows still dismally low. It seems the summer holidays have arrived earlier in the EU this year.” The same source added, “Expectations on the forward trend will centre on China. The monetary easing coupled with the fiscal stimulus which China is getting ready to implement should be quite supportive.” Another seller of ex-US and ex-EU scrap commented, “[Turkey’s import scrap] market is now balanced… there are not many offers available and it is in line with the demand coming from Turkish mills.” Another market player said he believes that prices are now at around $385/mt CFR Turkey on average for HMS I/II 80:20 scrap. SteelOrbis hears that there is also demand received from alternative markets such as Egypt and Bangladesh. Three European cargoes are reported to have been sold to Egypt and one to Bangladesh, though this information was not confirmed at the time of publication.
Despite the softening observed in Turkey’s import scrap market, prices seem set for stabilization. Since late 2022, Turkey’s import scrap prices have mostly remained above $384/mt CFR on average for benchmark HMS I/II 80:20 scrap, only declining below this level in early May, to recover again within a month. Most market players initially believed there was a resistance point at $385s/mt CFR, and we are now back at that point. Currently, expectations are for a declining trend as finished steel prices of Turkish producers are holding firm. But there is no upward push either in the market. Due to the depreciation of the Turkish lira (TRY) - even before it was actually seen - traders were increasing their rebar inventories. But as of this week, with the depreciation of the lira seeming to slow down, there are some traders considering their current positions. Some are more willing to lower their inventory levels to maintain cash flow, while some are more inclined to sell to realize profits. According to sources, the gap between the rebar spot market and producers’ prices is at around $20/mt today, with the Turkish lira being at 23.59 to the dollar.