Following a period of mutual resistance between sellers and buyers, a deal disclosed today, May 14, could be a signal that Turkish mills are ready to accept higher deep sea scrap prices.
SteelOrbis has learned that an ex-Germany deal has been concluded to Turkey for HMS I/II 75:25 scrap at $375/mt CFR and bonus grade scrap at $400/mt CFR. Considering the traditional gap between bonus and HMS I/II 80:20 grades, this information signals that the benchmark scrap prices are now at around $380/mt CFR, $3/mt higher than the previous booking done from the EU.
European scrap suppliers have been saying since the start of the current month that their collection prices would not allow them room to soften their prices. However, the main problem is the sluggish steel demand in Turkey. According to Turkish news agencies, 389 construction companies in Turkey started to make arrangements for bankruptcy in the first three months of 2024. In particular, the increased interest rates in Turkey have disrupted cash flow and made it difficult to obtain bank loans. Turkey still needs to buy scrap cargoes to complete its needs for June shipment. Several sellers think this means Turkey will be forced to accept higher prices, while there has also been some news of production cuts. It is rumored that another major mill in the Marmara region will halt production as of May 19 for two weeks. A similar rumor has been voiced in relation to a Karabuk-based re-roller. Whether this strategy to cut capacity utilization rates will become more widespread or not will be monitored closely since it will be a decisive factor in determining Turkey’s scrap needs.