Following the significant price decrease recorded in Turkey’s import scrap market on June 25, the market has remained silent with Turkish mills exerting pressure on import scrap quotations.
As SteelOrbis reported before, Turkish mills have almost completed their purchases for July shipments and are under no pressure to conclude new deals as they are thought to have enough inventories for July production.
Market sources state that there are three to four cargoes offered to Turkey from the US at around 260/mt CFR, while buyers are unwilling to conclude contracts at this level and instead are asking for $255/mt CFR Turkey and below for this grade. In general, buyers’ price ideas for deep sea scrap are in the range of $250-255/mt CFR, SteelOrbis hears, though sellers are not ready to make sales at this range for now. Suppliers of deep sea scrap are now trying to fulfill their commitments resulting from previous sales closed at higher quotations. As they are trying to ship these cargoes without delay, they are currently not under much pressure. “Things can change when purchases for August shipments start,” one market source told SteelOrbis.
Several market players confirm that scrap collection prices in Europe have declined by €3-5/mt and are now at around €195-198/mt. Meanwhile, domestic scrap prices in the US are expected to move down by $10-15/mt in the July buy-cycle, though uncertainties continue to surround the US market.
Some believe that Turkey’s import scrap market will not experience any oversupply or shortage problem in the coming period. While no one in the market anticipates a collapse of deep scrap prices, considering $250/mt CFR to be the current bottom, they do not rule out a slight decrease from the $250/mt CFR level. It is largely believed that premium deep sea scrap quotations will remain in the range of $250-260/mt CFR Turkey. Turkey is expected to buy at least 30-35 cargoes for August shipment, while purchases are foreseen to start towards the end of the first week of July.
Having said all this, market players also emphasize that there are still too many uncertainties in the market, such as a possible second wave of the pandemic, Turkey’s lack of exports, and the negative economic outlook both globally and domestically. On the other hand, it is heard that some Turkish mills are planning to increase their production rates, citing various support programs and the fact that studies are being carried out in the country in order to overcome impacts on the economy. Moreover, sales heard yesterday in the local Turkish rebar market - for a total of around 85,000 mt - have strengthened the sentiment.