Today, October 15, Turkey’s import scrap market has seen increased price levels for ex-US cargoes, more in line with the previous expectations voiced earlier this month, though market sources are cautious about their sustainability. Meanwhile, billet offers with short delivery periods and local Turkish billet prices are gaining strength, while the Asian billet market is softening.
SteelOrbis has learned that an ex-US scrap deal was done by an Iskenderun-based producer for HMS I/II 80:20 scrap at $353/mt CFR, up $3/mt from yesterday. “There were hardly any ex-US cargoes left in the market yesterday. The existing suppliers did not accept lower levels, and this is the result,” a scrap supplier commented. As a result, SteelOrbis’ reference prices for this grade have been revised to $350-353/mt CFR, moving up by $1.5/mt on average.
European scrap exporters’ collection costs in the Benelux region have increased to €250-255/mt DAP, SteelOrbis has heard. With the euro-US dollar exchange rate at 1.1637, their export prices are not expected to soften in the short run. “It will depend on freight costs though,” a European scrap supplier said today, adding, “The new tension between the US and China about ocean transport is not helping either.” Late yesterday, demand received from Turkish mills increased, market sources report, while the number of available offers in the market has not changed much. “Ex-Baltic cargoes were offered at around $352/mt CFR Turkey. Despite their willingness to negotiate, they are not cutting their offers below $347-348/mt CFR,” a source said. Also, it is observed that ex-US scrap cargoes are now offered at around $355/mt CFR, signaling that $353/mt CFR is acceptable to sellers.
On the other hand, sentiments regarding Asian billet exports have worsened this week as the expected rebound in local demand in China has failed to emerge and so traders have become more aggressive, offering in short positions as they believe the downtrend of prices will continue. In Turkey, most deals have been done for local market or import origins like Russia with rather short lead times. Today, October 15, Turkey’s Kardemir announced billet offers at $500/mt ex-works for S235JR and $510/mt ex-works for B420 grade, up $8/mt from the previous sales. The producer managed to sell over 60,000 mt and closed its sales before noon. Import offers from China have decreased by another $5/mt over the past week to $460-465/mt CFR at the lowest for November shipments, with not much interest seen among buyers, although the prices are quite workable against the current production costs of Turkish mills. According to sources’ estimations, with $345-350/mt CFR import scrap levels, Turkey can produce billet at around $500-505/mt.
