Transaction activity in the Turkish import
scrap market has been very quiet since last week. Only one ex-US deal to
Turkey concluded last week has been officially confirmed - for HMS I/II 80:20
scrap at $310/mt CFR from Houston port, declining by $3-4/mt compared to transaction levels one week earlier. No new transaction has been heard since the beginning of the current week.
Currently,
scrap suppliers to
Turkey are eager to sell the
scrap they have in hand, causing oversupply in the import
scrap market in
Turkey. Turkish producers, which have so far not concluded any
scrap deals, are soon expected to turn the current situation to their advantage and sit down with
scrap suppliers to negotiate. Turkish producers will likely seek to impose their desired price levels on
scrap suppliers during negotiations.
Aggressive billet offers from China to
Turkey have caused other billet suppliers to reduce their offer prices, also putting downward pressure on
scrap prices. With the decline recorded yesterday, January 26, iron ore prices with 62 percent Fe content have fallen to $63.5/mt CFR China, their lowest level since May 2009. Due to the approach of the Chinese New Year, steel production activities in China have already slowed down, and so iron ore prices are not expected to improve in the short term. On the other hand, the finished steel sales of Turkish producers have been slack and demand has been weakening on a daily basis. Under these circumstances, market sources believe that import
scrap prices may decline a little further and then bottom out.
Market sources believe that last week there were other ex-US deals concluded below the price level in the transaction already referred to, and which buyers and sellers want to keep quiet. Such lower price levels would be in line with the negative factors mentioned above.
While
scrap prices are expected to decline a little further, a snowstorm has started to hit the northeastern states of the US and may also disrupt
scrap shipments and
scrap collection activities. It will be clearer in the coming days whether this situation will impact on the import
scrap price trend in
Turkey.