Turkish mills have continued to close deals for June shipments, but have preferred prices below $380/mt CFR for new cargoes.
SteelOrbis has learned that an ex-Denmark cargo was bought by an Iskenderun-based mill on Friday, May 26, for HMS I/II 85:15 scrap at $386/mt CFR. According to the market sources, the total tonnage of the cargo is around 20,000 mt. The gap between benchmark grade HMS I/II 80:20 scrap and the material in this cargo is considered to be around $3/mt. Hence, ex-Baltic scrap prices are now in the range of $379-382/mt CFR.
Another ex-Belgium cargo was disclosed to the market today. The deal was done by a Marmara-based producer for HMS I/II 80:20 scrap at $377/mt CFR, for June shipment. This price is considered to be the bottom level for ex-EU scrap prices. Ex-EU HMS I/II 80:20 scrap prices are currently in the range of $377-380.5/mt CFR.
Collection prices at EU export yards are still at €305/mt DAP and above. Some sub-collectors still ask for €310/mt DAP, citing the still slow pace of scrap generation. “It will all depend on the performance of Turkish mills’ finished steel sales,” a Baltic-based scrap supplier commented earlier today, June 1. Another source on the sellers’ side said, “Alternative markets on the Indian subcontinent cannot fill the gap caused by Turkey’s absence: their financial structure and demand is not similar to Turkey’s.” A third source SteelOrbis talked to said, “Everyone will decide according to their own position. If they have a profitable cargo on hand, they will obviously sell.” Turkish mills are still struggling to find foreign currency, particularly dollars from banks. The uncertainties regarding this problem may be resolved after the announcement of the new council of ministers in Turkey. The announcement is expected to be made late on Saturday, June 3. Meanwhile, some rebar in the local Turkish market has changed hands this week. Domestic traders report that there is almost no demand coming from construction sites. “However, there may be a revival in the coming week since Turkey now needs to start the rebuilding efforts for the earthquake-hit region,” a large trader based in Istanbul commented. Another source said that, starting from Iskenderun, construction activities are expected to gain pace in the coming weeks. In general, deep sea scrap prices are anticipated to move closer to $400/mt CFR for deep sea HMS I/II 80:20 grades, with Turkey starting to procure cargoes for July shipments.