With new deals disclosed in Turkey’s import scrap market, it is observed that the Canadian supplier still exerts pressure on prices. Due to the high number of offers both from the EU and the US, most Turkish mills do not feel pressure to move quickly for new bookings. On the other hand, winter conditions are taking their toll on the collection side, and most deals recently done need more collection to meet the committed tonnages.
As heard today, January 22, the Canadian scrap supplier has signed a contract with an Iskenderun-based producer for 40,000 mt of HMS I/II 95:5 scrap and 10,000 mt of shredded scrap at the average level of $435/mt CFR. This information signals that ex-US HMS I/II 80:20 scrap quotations are now at around $420/mt CFR. Also, some sources reported that the seller may have another cargo ready to be offered.
Meanwhile, an ex-Netherlands deal was done by the same producer with the HMS I/II 80:20 scrap prices standing at $410/mt CFR. This transaction means a $8/mt drop for the European scrap quotations by itself from the previous ex-Belgium booking, deeper than the initial expectations of a softening on the deep sea segment. Several European scrap sellers stated that they are not ready to accept such levels considering their collection costs and collection pace.
There was also a rumour of an ex-UK booking, a third deal the same producer has reportedly concluded at $412/mt CFR for HMS I/II 80:20 scrap. This deal is undebatably rejected by the seller, who added that “their quotations is still at the mid $420s/mt CFR and will remain at such levels.” SteelOrbis will revise its ex-EU scrap prices to $410-415/mt CFR for now and wait for a second ex-EU deal to confirm the full drop indicated by the ex-Netherlands deal.
The snowy weather is not just hindering the collection in the EU, but it is expected to have a negative impact on the US East Coast. A major European scrap supplier states “collection remains difficult and cost prices remain at elevated levels.” While some US-based sources initially thought the local scrap prices will remain firm during the February buying cycle, recently it is observed the US flat steel market has started to lose momentum, leading other scrap market sources to report they’re already hearing chatter that mills may try to take prices down again in February. Although Turkish mills have completed their deep sea scrap procurements for February shipment, there is still a long way to complete March shipments. Scrap generation will play a major role when the purchases start for March term. Also, high number of sources believe that Turkey’s domestic rebar demand may recover around the second half of February. This hope prevents Turkish mills to reduce their capacity utilization rates even in times when almost no profit is written in the books. An important note came from Turkish Statistical Institute regarding the house sales recorded in 2023. According to the data, house sales in 2023 declined by 17.5 percent annually to around 1.2 million units, which is the lowest number recorded since 2014.
