According to US sources, Turkish producers have begun to negotiate several ex-US HMS I/II 80:20 cargoes at the rate of approximately $305-$310/mt CFR, which is $10-$15 /mt down from previous bookings. It is expected that Turkish production will continue to increase over the coming weeks as the month of Ramadan comes to a close. However, industry players caution that prices will more closely resemble those of the US domestic market as Turkish mills keep one eye on the US domestic trend and the other on the Far East when determining their import scrap pricing. With both the US and Far East scrap markets recently showing some signs of slowdown, it may be too early to assume that there will be any substantial price movement for ex-US scrap destined for Turkey.
Freight rates, on the other hand, could be on the move in the near future. There is a growing number bulk vessels being dry docked, leading to a possible shortage in available ships, which may cause freight rates to rise slightly, one industry professional tells SteelOrbis. This is a development that many East Coast exporters will keep an eye on, as an overwhelming majority of ex-US scrap heading for Turkish ports is transported by bulk vessels.
US scrap bookings to Far Eastern producers have been few and far between recently and, according to industry sources, they will likely continue to follow this trend into the near future. With high inventories on the ground at Far East mills and sluggishness in the finished markets, rebar in particular, major transactions on most current ex-US scrap offers to Asia are not expected. Recent transaction prices of ex-US HMS I material to Korean and Taiwan are heard at $325/mt CFR and HMS II is offered at $315/mt CFR via container, both down from previous weeks. Meanwhile, Chinese domestic scrap continues to be below import prices, causing ex-US offer prices to drop $5/mt within the last week, to their current range of $350-$360/mt CFR via bulk shipments.
Following an increase of approximately $20/mt in the US domestic market, it is expected that the local US scrap market will trend sideways in the coming month. It is believed that by next month, the recently resumed operations of domestic blast furnaces will have already acquired the prompt material that they needed to begin production. Next month the pace of purchases should slow down, and this will likely lead to a slight slowdown in domestic scrap demand.