We mentioned in our reports last week that Turkish mills' stocks had diminished to critical levels and had started to emit SOS signals. At the start of last week, although the Turkish mills were in the market for purchases aimed at satisfying their minimum needs, they did not buy scrap since they were unable to find the desired price levels and so they opted instead to buy reduced-price ex-Russia and ex-Ukraine billets. However, since their furnaces were still operating, the Turkish producers were unable to abandon scrap purchases entirely. Thus, after a certain amount of haggling, some mills concluded scrap deals from mid-week on.
Last week, when most scrap deals heard were for HMS I/II 70:30 material, price levels were in the range of $219-223/mt CFR Turkey. Since ex-US scrap prices failed to decline to the desired levels, no deals from this region have been reported so far. Meanwhile, in the past week an ex-Baltic scrap deal caused a surprise in the Turkish market. The cargo in question, which was composed of high grade scrap such as shredded scrap, P&S and A3 scrap, was sold at the price level of $225/mt CFR Turkey. In addition, a deal for another cargo, composed of shredded and HMS I/II 90:10, was concluded by a Turkish mill at the price level of $233.5/mt CFR Turkey from Denmark. On the Black Sea side, ex-Romania A3 deals at $220/mt CFR Turkey have been observed; however, although there have been some ex-Russia offers at the level of $260/mt CFR Turkey, no deal has been heard yet.
Chinese purchase activity, which had kept US exports alive to some degree, is now heard to have stopped. Market players think that the overall sluggishness will likely bring pressure to bear on ex-US scrap suppliers.
On the other hand, with their current price level of $320/mt FOB and continuous decline trend, ex-CIS billets are still attractive for Turkish steelmakers with EAFs, and are causing the Turkish mills to maintain their billet purchase activity instead of buying scrap.
At the current juncture, when hard times are being experienced in both the global economy and the steel markets, mills are seen to be adopting a "one day at a time" approach and hesitate to draw up long-term and even short-term plans.