In a deal done on Friday, March 15, it was observed that ex-US HMS I/II 80:20 scrap prices failed to reach to estimated levels of $383-385/mt CFR, calculated from the traditional gap with ex-EU prices, based on an ex-EU transaction done at $377.5/mt CFR.
SteelOrbis has heard that the ex-US scrap booking done by an Izmir-based producer was closed at $377/mt CFR for HMS I/II 80:20 scrap and at $397/mt CFR for bonus grade. Some market sources think that the HMS I/II 80:20 scrap price was at $378-379/mt CFR. The tight gap between EU and US prices is viewed by some market players as upward pressure from the EU side. Nevertheless, SteelOrbis will correct its ex-US scrap prices to $380-383/mt CFR, reducing them by $2.5/mt on average.
As the market tries to find its way, sellers are keeping their prices firm and continue to ask for prices above $380/mt CFR. A US scrap seller was offering a cargo to Turkey at around $385/mt CFR for the benchmark grade, while SteelOrbis has also heard an EU-based supplier offered this grade at around $380/mt CFR. Some scrap sellers of various origins that had been seeking buyers have withdrawn from the market due to their expectations of a recovery in prices. US suppliers, who had been mainly exerting pressure on the market early this month with their aggressive pricing, are now rejecting bids at around $380-381/mt CFR. SteelOrbis hears that Baltic region-based scrap suppliers’ price ideas remain at similar levels at around $378-380/mt CFR Turkey. Collection prices in the EU have also moved up, to €305-310/mt DAP, while some exporters state that higher levels at around €320/mt DAP are also voiced by sub-collectors.
Short sea scrap deals have been signed to Turkey at $355/mt CFR for Romanian HMS I/II 80:20 scrap. Ex-Italy prices for this grade are at around $365/mt CFR and above. Sellers’ ideas for short sea sales to Turkey remain higher this week amid relatively optimistic expectations.
Following the decision of the Turkish central bank announced in the middle of last week that ordered banks to put portions of their required lira reserves into blocked accounts within the scope of the central bank’s policy to tighten monetary policies, loan interest rates are rising. The livelier demand observed last week in the local rebar market due to the depreciation of the Turkish lira against the US dollar is now silent once more as market players foresee liquidity problems. With the local elections drawing closer, uncertainties prevail. Some market players expect Kardemir to open rebar and billet sales in the local market, adding that, with the current loan rates from banks, buying from Kardemir would be attractive for some traders due to the producer’s advantageous payment terms. Today, 12 mm rebar spot prices in Turkey have settled at TRY 23,100-23,900 mt or $596-616/mt ex-warehouse, depending on the region, at an exchange rate of $1 = TRY 32.31. Also, the central bank will make a decision on interest rates on Thursday, March 21. According to Bloomberg, the bank is expected to keep interest rates stable this month.