Reports of three deep sea scrap bookings, all done last week, are circulating in the Turkish market. The price in the relatively older ex-UK deal does not show much change. The ex-Baltic booking indicated a decent decline for the grade in question, though this fall had been anticipated. Ex-US scrap prices have softened slightly in a deal done last Friday. The negative mood in Turkey’s import scrap market continues to persist.
The deal from the Baltic region was done on Friday, February 16, by a Marmara-based Turkish steel producer for 22,000 mt of HMS I/II 80:20 scrap at $409.5/mt CFR and 3,000 mt of bonus grade scrap at $429.5/mt CFR. The cargo will be shipped in the middle of March from Gdansk. This deal from the Baltic means a $5.5/mt fall for ex-Baltic HMS I/II 80:20 scrap prices.
Another ex-US scrap deal was closed by the same Marmara-based steelmaker on Friday, with HMS I/II 80:20 scrap at $414/mt CFR, indicating a $1/mt softening for ex-US cargoes. This cargo will be shipped in the first half of March.
The third deal was a little older, done on Wednesday, February 14, with ex-UK HMS I/II 80:20 scrap standing at $410/mt CFR Izmir. This cargo has a total of 18,000 mt and will be shipped in the middle of March. There have been several developments since Wednesday, so this price level is not expected to stick anymore. “When there are lower prices from the Baltic, no mill would pay this level to the UK or the EU,” a source at one Turkish mill said.
Meanwhile, the Institute of Scrap Recycling Industries’ (ISRI) Mid-America Chapter held a Consumers Night banquet in St. Louis, Missouri, and the consensus among attendees was that US scrap prices will likely trend downward in March. Meanwhile, European scrap flow is still considered to be insufficient. A number of sellers from the EU voice their expectations of a rebound in prices to Turkey after this round of bookings ends and determines the bottom level of prices. A EU-based source said, “We know what we are seeing on the ground in terms of scrap collection. Therefore, I am confident that prices will rebound.” Meanwhile, the uncertainties about taxes have been largely resolved. It is understood that the tax regime in Turkey will have additional costs for producers as well as for traders, being expected to double their tax payments. This created a small revival in rebar sales at the end of last week, but at lower price levels aimed to secure cash flow. This trend to lower domestic rebar quotations may continue this week and exert further pressure on the local rebar market. One trader commented, “We are not expecting the rebar demand revival which traditionally starts towards the end of February and early March. The current circumstances do not match the traditional trends.”