Turkey has concluded two deals from the US and the UK, while the US deal was disclosed to the market today, April 26, it is a relatively older deal. The ex-US scrap prices have remained stable, while the UK origin cargo pushed European scrap prices to lower levels.
SteelOrbis has learned that a Black Sea-based Turkish steelmaker concluded the deal from the US for 22,000 mt of HMS I/II 85:15 scrap at $586/mt CFR and 8,000 mt of P&S grade scrap at $601/mt CFR. The cargo was booked on April 22 and will be shipped in May. The estimations for HMS I/II 80:20 scrap remain at $581/mt CFR, stable compared to the previous ex-US booking.
Also, an Izmir-based producer has concluded a deal for ex-UK cargo, with 18,000 mt of HMS I/II 80:20 scrap at $555/mt CFR, for May shipment. The ex-UK cargo indicates a sharp decrease from the estimated levels of $570s/mt CFR Turkey.
Despite the downward revision in deep sea scrap prices, suppliers say that they are still facing resistance from Turkish mills, who are waiting for lower quotations. According to one European supplier, prices may decrease further after the end-of-Ramadan holiday. “Mills are not sharing any bids as they try to avoid making a mistake,” a supplier commented. The collection prices in Europe, particularly in the Arag ports (Amsterdam, Rotterdam, Antwerp, Ghent), have decreased from the €480/mt recorded at the beginning of the current week to €460s/mt in Amsterdam. Another supplier said that, even with the current collection costs, if European sellers believe that prices will fall further they may prefer short sales.
SteelOrbis hears that Turkish mills’ price idea for ex-Romania HMS I/II 80:20 scrap is at around $540/mt CFR. The previous sales were done in the range of $550-555/mt CFR. In the Mediterranean segment, from Israel and Cyprus price levels are at $520-530/mt CFR, but since there has not been a deal done for some time, as one seller stated, “We shall see the numbers first.”
A Russian scrap seller SteelOrbis surveyed commented about opening accounts in Turkey, stating that this does not solve all problems. “Indeed, payments in dollars and euros to Russia are practically impossible due to sanctions, but Russian banks do not yet work with Turkish liras. In addition, all shipping schemes to Turkey were built through European banks (financing, letters of credit, etc.), now this is impossible, European banks do not work with Russia. There are also very big problems with vessels from Russia. Most ship owners are unable to enter Russian ports due to sanctions or insurance restrictions,” the source reported. The ships with Russian flags are mostly small and cannot reach Turkey without bunkering, according to this source. And they are not allowed to enter EU ports and freight is very high. The same source answered a question about Russia’s scrap export duty saying, “The scrap export duty of €290 is in any case prohibitive, with such a level of freight and costs, the purchase price no longer matters. But even if there is a fee of €290 (the decree has not been signed yet), it will only be in excess of the quota, which will be calculated based on the results of last year. Within the quota, it will be €100. And it will not be possible to exceed last year's quota under these conditions.”