A new rumor circulated in Turkey’s deep sea scrap market late yesterday, May 7, indicating that another ex-US deal was closed at a relatively stable price. The information said the deal was closed by an Izmir-based producer for HMS I/II 90:10 scrap at $342/mt CFR, with shredded and bonus grades at $359/mt CFR, for June shipment. This booking was denied by the buyer and the seller, but several market sources report that it was in fact done. Others think the benchmark scrap price indication of $339/mt CFR is currently workable anyway. The previous deal was closed earlier this week with the HMS I/II 80:20 scrap at $338/mt CFR.
The frequently asked question in Turkey’s import scrap market is whether the recent uptrend will be short-lived or otherwise. It is known that European sub-collectors are receiving bids from exporters in the range of €255-257/mt DAP, approximately €5/mt higher than last week. “Exporters realized that the scrap flow to yards is almost zero when prices decline below this level,” a German sub-collector said today, May 8. On the other hand, the first indications coming out of the US local market are showing a drop of around $30-40/mt in May buy-cycle prices, depending on the grade. “With oil prices softening, flow to export yards may increase in the US, but this is not expected to create a surplus just yet for exporters,” one source told SteelOrbis.
The main problem continues to be Turkish producers’ steel sales. Turkish mills are trying to increase their rebar sales prices. As SteelOrbis reported yesterday, ex-Turkey rebar offers still vary at $540-550/mt FOB for late May shipment, stable week on week. According to sources, below $540/mt FOB does not seem workable under the current market conditions. Most international buyers are in wait-and-see mode waiting for the next EU rebar quota round which will begin on July 1. In the Turkish domestic rebar market, official offers have settled at $540-560/mt ex-works, depending on the region, also unchanged week on week, but workable levels have moved up by $10/mt in this period.
“The latest price hike recorded in ex-US bookings is justified considering the latest rebar sales. We expect more deals to be closed before the week ends at around these levels,” a source at a major Turkish steelmaker said. There seems to be a consensus among market players that the deep sea scrap market may remain sideways for a bit, though they agree there still is some small upward potential for prices in the coming weeks. “We expect ex-US HMS I/II 80:20 scrap quotations to move towards $345/mt CFR in the end,” a supplier commented. Turkey is receiving billet offers from China around the range of $460-463/mt CFR, while ex-Malaysia billets are at around $470/mt CFR, all for July shipment. Scrap is still more attractive for Turkish mills for the June shipment period, while some sources believe that the number of deep sea cargoes that Turkish mills buy in May may be lower than usual.