Two ex-US scrap deals in Turkey done late last week have pushed prices down significantly. The decline was not viewed as a surprise by market players, considering the silence in the market and the unwillingness of Turkish mills to buy deep sea scrap at higher price levels. As SteelOrbis mentioned last week, finished steel trading had slowed down in Turkey and prices were not providing much support for the previously recorded scrap quotations.
SteelOrbis has learned that a Marmara-based mill concluded the first ex-US booking on Friday, March 24, for 25,000 mt of HMS I/II 80:20 scrap at $444/mt CFR, 12,000 mt of shredded scrap at $464/mt CFR and 3,000 mt of bonus grade scrap at $464/mt CFR, for April shipment. Previously, ex-US scrap prices were standing at $457-460/mt CFR, reduced to this level in the absence of new deals and amid the negative sentiment prevailing in the market.
Another ex-US scrap booking was done by the same producer for 30,000 mt of HMS I/II 85:15 scrap at $446/mt CFR and 15,000 mt of shredded scrap at $461/mt CFR, with the latest shipment date being May 10.
Under the current circumstances and the lack of new deals from the region, SteelOrbis has revised it ex-EU HMS I/II 80:20 scrap prices to $435-440/mt CFR. A seller of ex-US and ex-EU cargoes commented, “There is some more room for deep sea scrap prices to move down, by around $5/mt.” However, another ex-US and ex-EU scrap seller stated, “It is too early to comment since these ex-US deals are relatively new. People need to digest these levels and collection prices in the EU have not decreased yet.” Meanwhile, market players believe that construction activities may accelerate ahead of the presidential and parliamentary elections in Turkey to be held on May 14. “Not all expectations regarding the rebuilding of the earthquake-hit region will be met, though we can see that the current government is trying to speed things up,” a market source in Iskenderun commented. Another issue to address is the high credit interest rates or the tightness of credit availability in Turkey, which makes it hard for citizens to buy cars, houses, etc. Nevertheless, import scrap quotations in Turkey need support from the finished steel segment.
While there have been no new deals, short sea scrap prices have now been revised to the range of $415-425/mt CFR. The most recent deal from Romania was closed at $428/mt CFR and since then buyers are exerting strong pressure on short sea scrap. Some even bid closer to $400/mt CFR, failing to find willing sellers.
On the other hand, Turkey’s finished steel prices are considered to be on the high side by foreign buyers. To find opportunities to export, Turkey needs to reduce its export offers. Currently, Turkey’s rebar export quotations are in the range of $720-730/mt FOB. As of today, March 27, Turkish mills have cut their list prices for domestic rebar to $740/mt ex-works, there are some rumours that sales even at $730s/mt ex-works are being done by mills in the Marmara region. Last week, an Izmir-based producer was heard to be selling at $735/mt ex-works. Currently, the cost of converting scrap to rebar is believed to be approximately $260-270/mt. Meanwhile, as reported by SteelOrbis on Friday, billet prices are moving down in all regions, not just in Turkey. The SteelOrbis reference price for ex-Russia billet has started to decline, losing $10/mt in total during the past week to $585-605/mt FOB Black Sea.