Turkish mills’ scrap bookings remain slow

Last week, Turkish mills limited themselves to smaller volume ex-Black Sea scrap bookings, instead of booking ex-deep sea scrap, while this week silence prevails in the Turkish import scrap market. Given the absence of Turkish mills in the import scrap market, suppliers have also withdrawn from the market and thus there are not many import scrap offers in the Turkish market.
 
Last week, no new ex-US scrap offer was heard. Turning to the current week, SteelOrbis has learned that the price of a mixed ex-US scrap cargo including HMS I/II 80:20, shredded scrap and P&S scrap stands at $477/mt CFR.
 
Last week, ex-Europe HMS I/II 70:30 scrap was being offered to Turkey at $448/mt CFR, while the price level for HMS I/II 80:20 scrap was in the range of $460-465/mt CFR. This week, the euro has continued to strengthen against the US dollar, with the exchange rate hitting 1.45 as of today. While this raises anticipations of a downward price correction for ex-Europe scrap, so far no offer or transaction has been heard which may provide support for this expectation.
 
Nowadays, suppliers of ex-Black Sea scrap are facing difficulties in coping with significantly increased freight rates. While the freight rate from Russia's Rostov port to Turkey's Marmara Sea ports has reached $45/mt, when river transportation is taken into account, rates may reach up to $70/mt. In the Turkish market, the ex-Black Sea A3 scrap price stands at above $465/mt CFR Marmara Sea. In Romania, the scrap collection price is about $415-420/mt, while the ex-Romania A3 scrap price in Turkey stands at $460-465/mt CFR levels.
 
 The turbulent situation in the international markets as well as the rapid appreciation of the US dollar against the Turkish lira raises concerns in the markets. The increasingly pronounced risk of a new economic depression has resulted in a weakening of finished steel sales in the Turkish domestic market. It is thought that this may also affect Turkish mills' scrap bookings, driving them to shift their bookings towards smaller volumes, away from larger volume deep sea scrap bookings. While the Turkish mills have been away from the scrap market for quite a while now, although they need to book scrap, their ex-deep sea scrap bookings are expected to remain limited.