Turkish buyers expect lower prices for import scrap

With many foreign scrap suppliers seeking to conclude sales to Turkey despite demand not being very strong and due to the $7.25/mt difference between two recent ex-US HMS I/II 80:20 grade scrap deals heard in Turkey (one concluded at the beginning of last week and the other at the end of the same week), Turkish steel producers have started to expect lower prices for imported scrap. At present, quite a few deep sea scrap suppliers are in the market, actively trying to conclude sales to Turkey.
 
At the beginning of last week, a Canadian scrap supplier gave an offer to Turkey for a cargo consisting of 30,000 mt of HMS I/II 90:10 scrap, 15,000 mt of shredded scrap and 5,000 mt of bonus grade scrap at the average price level of $200/mt CFR. However, after the declines seen in ex-US scrap quotations to Turkey, the same Canadian supplier adjusted its offer for the same cargo to the average price level of $192/mt CFR.
 
Meanwhile, SteelOrbis has heard that ex-Baltic scrap offers to Turkey are currently in the range of $185-190/mt CFR, while this price range is considered to be very high compared to Turkish buyers' price expectations. In the middle of last week, an ex-St. Petersburg booking in Turkey was concluded for a cargo consisting of 18,000 mt of HMS I/II 80:20 scrap and 2,000 mt of bonus grade scrap at the average price level of $184/mt CFR.
 
Meanwhile, since Turkish steel producers have been using the ex-US HMS I/II 80:20 scrap price at $185.75/mt CFR seen in the latest deal as a reference point for deep sea scrap cargos, their price expectations for deep sea scrap are now somewhat below $185/mt CFR. In this context, a Turkish producer, which made a firm bid for a large scrap cargo at $185/mt CFR last week, is heard to have withdrawn this offer in recent days.
 
Within the Black Sea scrap market, Russian scrap suppliers are heard to be finding it difficult to offer prices which will gain acceptance, against the backdrop of interruptions of scrap collection activity in Russia due to harsh winter conditions. Meanwhile, ex-Romania scrap prices to Turkey in deals concluded last week were heard at $182/mt CFR for prompt shipment and at $180/mt CFR for shipment within the customary period. In addition, the latest ex-Croatia scrap deal in Turkey was concluded at $180/mt CFR Aliaga.
 
Following Turkish steel producer Kardemir's announcement of a downwards revision of its domestic billet prices by $12/mt, on January 19, Turkish steel producers are expected to increase their pressure on import scrap prices. Also, due to pressure to conclude sales, foreign scrap suppliers are no longer expected to resist Turkish steel producers' requests for lower prices, and so import scrap prices are expected to indicate a further slight decrease in the coming period.