Turkey’s latest ex-EU scrap deal was closed at a lower but anticipated level. SteelOrbis had already reported that European scrap suppliers would try to keep their prices somewhat firm against the backdrop of the aggressive price policies of US-based sellers. The ex-EU deal done last Friday shows that the gap between ex-US and ex-EU cargo prices is slightly narrower than usual.
SteelOrbis has learned that the ex-Netherlands deal was done by an Izmir-based mill on Friday, March 1, for HMS I/II 80:20 scrap at $381/mt CFR and for shredded and bonus grades at $401/mt CFR. This cargo will be shipped in April. Before this deal was disclosed, SteelOrbis had forecast ex-EU scrap prices would decline towards $380/mt CFR, and has made a small revision in European benchmark scrap quotations as of today, March 5. The traditional gap between ex-EU and ex-US scrap prices is around $5/mt, and so it is believed European scrap suppliers will try to keep their prices firm as much as they can.
On the other hand, collection prices in the EU are under significant pressure. An Amsterdam-based scrap exporter’s bids for HMS I/II 80:20 scrap stand at €310/mt DAP, while workable prices for Belgium are believed to be closer to €300/mt DAP. Scrap flow to yards is reported to be slow. A Germany-based sub-collector said they have already reduced their own collection prices for uncut scrap by €20/mt, adding, “We are not seeing panic yet in the European market. No one is in a rush to dump their inventories, because supply is still on the low side.” An ex-US scrap supplier has reported that bids from Turkish mills for this grade stand at around $380/mt CFR, but they are not willing to cut prices to such levels. Ex-US scrap offers to Turkey remain at around $385/mt CFR. There are at least 13 deep sea scrap cargoes being offered to Turkey, according to market sources. One European scrap seller said, “There are also no alternative markets right now for us to negotiate with. If we consider it hard for European suppliers to cut their prices to Turkey, there are also sufficient offers from other regions.” The negative sentiment in China and the similarly pessimistic outlook for the global finished steel market are not helping. Meanwhile, Ramadan starts on March 10, leading market players to take a step back from trading. A source commented, “There is also the impact of the uncertainties arising ahead of Ramadan and the elections on March 31. No one knows if there will be a significant rise in energy tariffs after the elections. As a result, Turkish mills are reluctant to cut rebar prices, maybe the only logical move to accelerate domestic trading as well as exports.” SteelOrbis observes that most market players are pessimistic in their expectations for the scrap market in the coming weeks, though some expect steeper price decreases as compared to others.