Turkey has accepted higher price levels for deep sea scrap this week. SteelOrbis hears that suppliers are offering higher levels as compared to the actual levels recorded in deals. The reason for the higher levels is explained by the slow flow of scrap to export yards, winter conditions disrupting collection activities, and the demand from Turkey. However, the last factor may change in the coming weeks as Turkey is now closer to completing its purchases for February shipments, with deals already concluded for 20-22 cargoes for February.
SteelOrbis considers that ex-European benchmark scrap prices are now standing at $422-423/mt CFR. An ex-EU scrap deal has been closed by an Izmir-based producer for HMS I/II 80:20 scrap at $423/mt CFR. Another rumour indicated late yesterday that an ex-UK scrap deal was closed by a Marmara-based producer for 25,000 mt of HMS I/II 80:20 scrap and 15,000 mt of shredded and bonus grade scrap at the average price level of $430/mt CFR. This second deal was denied by the reported seller, but most market players think it was in fact signed. The supplier of the ex-UK cargo said there was no booking yet and that they are currently voicing higher price levels as offers, adding they “fully expect the market to yield higher levels before the week is out.”
Meanwhile, an ex-Baltic booking is reported to have been done by an Izmir-based producer for HMS I/II 80:20 scrap at $423/mt CFR, while this deal is believed to be older than the others. Hence, SteelOrbis’ reference price for the ex-Baltic HMS I/II 80:20 scrap remains at $425/mt CFR.
The last deep sea scrap cargo, ex-Venezuela, was bought by another Izmir-based producer, with HMS I/II 80:20 scrap standing at $424/mt CFR.
Additionally, an ex-Croatia scrap deal is reported to have been closed at $405/mt CFR Izmir, while two ex-Italy scrap bookings have been signed at $405/mt CFR and $408/mt CFR, all for benchmark scrap grades.
As of today, January 10, Turkish mills are receiving ex-US scrap offers at $430/mt CFR and above. Some deep sea scrap suppliers say they have taken a step back to wait for higher levels. As mentioned already, suppliers’ expectations are positive for the future trend in the import scrap segment. On the other hand, import scrap prices in India have increased despite the lack of buying and sufficient local availability of cheaper scrap and sponge iron, coupled with low demand for raw materials, with Indian secondary mills lowering plant capacity utilization amid the excess supplies of rebar in the market. Meanwhile, trading activity in Turkey’s long steel export segment is somewhat better than during the pre-holiday season. Currently, ex-Turkey rebar offers vary at $610-620/mt FOB, versus $600/mt FOB for February shipment a week earlier. A few Turkish mills are even testing $630/mt FOB, but this level seems a little high under the current market conditions. In the local rebar market, Turkey’s Kardemir issued its rebar price at TRY 18,700/mt ($625/mt with the exchange rate of $1 = TRY 29.94), excluding VAT. According to sources, the mill succeeded in selling around 26,500 mt, while some say the total volume was around 30,000 mt. The main reason for the sale of such a considerable tonnage were the advantageous payment terms.