Turkish mills continue to show demand for scrap, while sellers have managed to conclude deals at higher price levels as anticipated. The increasing trend is expected to continue and more deals are expected in the coming days.
SteelOrbis has learned that a Marmara-based mill has concluded a deal from Finland for HMS I/II 80:20 scrap at $390/mt CFR and bonus grade scrap at $405/mt CFR. This level is equal to the upper end of SteelOrbis’ ex-Baltic prime grade scrap price range at $385-390/mt CFR.
Another deal has been done by an Izmir-based producer for ex-US HMS I/II 80:20 scrap at $394/mt CFR. This price is in the range of SteelOrbis’ estimated range of $385-395/mt CFR.
Deep sea benchmark grade scrap prices are expected to reach $400/mt CFR this week. Meanwhile, the local US scrap market has settled with a $20-31/mt decline for HMS I/II 80:20 scrap. As a result, US suppliers may become more active this week. However, the longevity of the current uptrend is questionable. Prior to the recent increases, Turkish mills were saying they may cut their production rates due to the lack of finished sales. However, there is an improvement on the finished steel side, supported by both local and export sales. When the immediate need for scrap in Turkey ends, the rising trend of prices may cease. SteelOrbis observes that the price fluctuations were greater in past months, but have been losing momentum. In general, prices rise rapidly when Turkish mills return to the market asking for closer delivery times, and they dip sharply when they take a step back to evaluate the situation. Nevertheless, the most recent decline in the benchmark HMS I/II 80:20 scrap price was $55/mt in total, while the benchmark price has already increased by $20/mt in August, and so the price fluctuations appear to have weakened. Alternative markets are playing a bigger role than they did in the past. In the absence of Turkey, mainly European scrap suppliers continue to sell to these alternative markets in the Indian subcontinent, Egypt, and sometimes in Far East Asian, reducing the pressure from inventories.
To secure tonnages, Turkish mills are focusing on short sea scrap. According to one source, “Demand for short sea is lively. The margin between short sea and deep sea scrap has shrunk again.” There was an ex-Israel scrap deal done at $460/mt CIF Iskenderun. Today, August 9, offers from Israel to Turkey are in the range of $465-470/mt CIF.