Fresh US-origin deal blurs Turkish scrap direction
Turkish scrap demand remained subdued throughout the week before the Easter holidays with a single deep-sea booking being done. Besides deals for domestic scrap, whose flow has improved, some mills meanwhile concluded short-sea bookings at low prices.
On Friday afternoon, a western Turkish long steel producer booked a US-origin cargo at $442/tonne cfr Turkey for HMS 1&2 90:10 and $460/t for shredded.
The deal has surprised many market players as Turkish mills were pushing for much lower levels, below $430/t cfr, especially following Kardemir’s latest billet sales.
With HMS 1&2 80:20 corresponding to $440/t cfr in this deal, this even points to an improvement in prices as the latest premium HMS 1&2 80:20 cargo was concluded at $439/t cfr ten days earlier. The market was mostly expecting US suppliers to be less resistant amid pressured obsolete scrap prices in the US domestic market, while European suppliers are suffering from firm dock prices and a strong euro at 1.09 per dollar.
On the short-sea market, although some short-sea suppliers resisted lowering their prices below $395-400/t cfr Turkey levels, others panicked and accepted selling at lower levels.
Following the Romania-origin HMS 1&2 80:20 sale at $382/t cfr earlier last week, another supplier is rumoured to have sold at $377/t cfr. However, this remained unconfirmed.
Despite the availability of cargoes, deep-sea suppliers remained mostly out of the market amid Turkey’s lacking appetite for scrap purchases.
One supplier tells Kallanish: “Kardemir’s billet prices appeared below market expectations. This has caused mills to further decrease their price targets for scrap. I am surprised to see a mill pay this [latest US-origin] price.”
“I was expecting to see the first deal at a much lower price, although most suppliers do not find Turkey’s price targets workable. However, the long-lasting period of waiting [rather than Turkish mills buying] has increased pressure on both prices and suppliers,” says another supplier.
Following the recovery seen in Turkish domestic rebar demand on Thursday, meanwhile, stockists’ buying interest continued on Friday. A western mill increased its price later in the day after selling 30,000 tonnes of rebar at $695/t ex-works. Other mills’ offers stood mostly at $700-710/t. Given the respite provided by domestic rebar sales, the market expects to see a stabilisation in prices with the return of Turkish mills to the scrap market in the coming days.
Market participants are discussing the possibility of the latest US deal having a special condition that raised its price, and it remains unclear if other mills will also resume scrap purchases this week. However, due to Turkey’s ongoing requirement for May-shipment scrap imports, most participants expect the current silence in the scrap market to break after Easter and before the Eid holiday.
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Anonymous
Very good overview of the weekly steel market.
Anonymous