With Turkish mills ordering high tonnages of import billets for September and October delivery, they are now seeking for scrap cargoes to support their furnaces. While the downward pressure exerted on scrap was successful and dropped HMS I/II 80:20 grade prices by $28.75/mt on average since the beginning of August, Turkish mills started to accept a small recovery during negotiations.
A new ex-US deal done by an Izmir-based producer was signed for HMS I/II 80:20 scrap at $363/mt CFR, shredded and bonus grades at $383/mt CFR. The increase is $3/mt as compared to the ex-US bookings done late last week.
Meanwhile, a Marmara-based producer has concluded a deal from Sweden for HMS I/II 80:20 scrap at $363.5/mt CFR and higher grades at $383.5/mt CFR. The deal was reportedly done today, August 28. This price is also $3.5/mt higher than the previous ex-Baltic quotation fixed in deals last week.
“There is more demand received from Turkish mills this week, a bit of a rebound in prices would not surprise anyone,” a European scrap seller commented. Another source said that the recovery in China is still presumed temporary, hence Turkish mills are not willing to pay higher levels for billets unnecessarily. “Nevertheless, it is becoming clear that Turkish mills will cut their capacity utilization rates in furnaces. After buying that much billet, it was inevitable. Therefore, their scrap need will remain on the lower side as compared to before,” the source added. Meanwhile, sources in the local Turkish rebar market pointed out that the price declines observed in the billet and scrap segments did not reflect on domestic rebar prices as much. As a result, some market sources believe that scrap prices will move up by around $5-10/mt in the coming rounds, citing Turkey’s lack of new deals done for the early October delivery term.