Turkey anticipates higher deep sea scrap prices, rebar demand still sluggish

Wednesday, 29 November 2023 17:49:50 (GMT+3)   |   Istanbul
       

Turkey’s deep sea scrap market has continued its uptrend, with support from the relatively livelier flat steel market, lower levels of scrap availability, and the approaching holiday season. Turkey is still looking for shipments for the first half of January. Although some producers show reluctance to accept higher levels, scrap exporters are exerting pressure for the acceptance of increased prices.

SteelOrbis has heard that an ex-Netherlands deal has been done by an Iskenderun-based producer, with HMS I/II 80:20 scrap at $388/mt CFR. As a result, ex-EU scrap prices have increased by $3/mt.

Also, another ex-Baltic deal has been done by a Marmara-based mill for HMS I/II 80:20 scrap at $386/mt CFR. This level is $3/mt lower than the previous price levels, though this decline is not expected to stick. Therefore, SteelOrbis’ ex-Baltic prices are still at $389/mt CFR on average.

Turkey anticipates higher deep sea scrap prices due to the ongoing demand for scrap in the country, which is supported by the sales done by mainly flat steel producers. Having said that, some sources believe that the surge in the flat steel market is near its end. As of today, HMS I/II 70:30 scrap collection prices in the EU are at around €315/mt DAP. For bonus grades, buyers are willing to pay a premium of €20/mt as usual. A Germany-based contact informed SteelOrbis that there are some negotiations done with one EU-based exporter for HMS I/II 80:20 scrap with offer prices at $400/mt CFR Turkey. Another sub-collector reported that they are keeping their inventory levels on the low side, trying to sell the tonnages they receive since they have concerns about a possible price decline which could be seen after the holidays. This decision was made after it the sub-collector realized that the German government will have a shortfall of approximately €60 billion in its 2024 budget, which is expected to slow down steel manufacturing and also to impact planned green energy projects. However, the euro-dollar exchange rate at 1.098 exerts pressure on CFR Turkey-based prices. US-based scrap suppliers have indicated that their target prices are at at least $405/mt CFR. As mentioned, Turkish mills are still seeking deep sea cargoes to be shipped in the first half of January. However, the questions raised regarding the sustainability of the current price levels continue to be asked. The Turkish rebar market is still sluggish. With the winter weather conditions felt strongly across the country, the construction season is closed. “There will not be noteworthy construction activity for at least two to three months. But before the local elections to be held on March 31, 2024, there is hope that the government may announce some incentives,” a source said today. Meanwhile, Kardemir opened its domestic rebar prices today at $592/mt ex-works and sold around 25,000 mt. Several market players think that Kardemir used the advantage of its deferred payment option. Currently, ex-Turkey rebar offers are standing at $580-600/mt FOB for late December-January shipment, stable over the past week.

Meanwhile, ex-Romania HMS I/II 80:20 scrap prices are in the range of $369-372/mt CFR. Sellers are aiming for $375/mt CFR and above. SteelOrbis hears that Italian scrap exporters are aiming for $385s/mt CFR.


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