Turkey’s ex-US scrap prices move below $420/mt CFR, EU suppliers still resist

Thursday, 08 February 2024 16:33:51 (GMT+3)   |   Istanbul
       

Following the softening observed in an ex-Baltic scrap deal in Turkey, ex-US scrap prices have also moved below the $420/mt CFR threshold. Most European scrap suppliers have been saying that it is not possible for them to accept lower than $420/mt CFR, with the Turkish market being squeezed significantly if the Europeans maintain their stance. Under the current circumstances, the Turkish scrap market has been described as “vulnerable.”

SteelOrbis has learned that an ex-US booking was done by a Marmara-based Turkish steel producer yesterday, February 7, with the HMS I/II 80:20 scrap price standing at $419.5/mt CFR. This level is $2.5/mt lower than the previous ex-US deal, placing ex-US HMS I/II 80:20 scrap prices slightly above ex-Baltic prices.

An ex-Russia scrap booking is reported to have been done by a Black Sea-based mill, consisting of 26,000 mt of P&S scrap at $432/mt CFR. Also, an ex-Denmark booking is rumoured to have been done by an Izmir-based mill, with HMS I/II 80:20 scrap at $419/mt CFR, the same level as in the transaction from Denmark closed earlier this week.

Reports of an ex-Netherlands deal were circulating in the market yesterday. According to sources, HMS I/II 80:20 scrap was at $418/mt CFR in this deal. But in the end, the buyer said this information was wrong. However, this changes little in terms of expectations. Considering the traditional price gap between the US and the EU, European benchmark scrap prices should be around $415s/mt CFR currently. Turkish mills’ bids are also around this level for ex-EU cargoes. For now, European scrap suppliers continue to resist. With the denial of the mentioned deal, there have not been any ex-EU transactions at lower price levels. SteelOrbis’ ex-EU HMS I/II 80:20 scrap reference price at $416/mt CFR on average remains only an indication.

The downward pressure on Turkey’s import scrap market is clearly coming from the ex-US and ex-Baltic cargoes. A US-based source commented, “One mill in Detroit tossed out some numbers, down $30/gt on primes, sideways on shredded and down $20/gt on P&S. This mill doesn't buy HMS. Now we are waiting for others’ announcements, and we’ll see how much pushback we get from sellers.” How much longer can European suppliers maintain their firm price policies is a question frequently voiced. On the other hand, the number of offers from other regions is still on the high side, without the EU. It is also observed that the soft deep sea scrap prices are negatively impacting the billet segment. A number of billet importers in Turkey have lowered their price ideas. According to market sources, offers from a number of Russian steel producers have been at $523-527/mt FOB Black Sea this week. Turkey’s rebar export offers stand at $610-620/mt FOB, with no fresh deals done. The official price range for domestic rebar in the Marmara and Izmir regions varies at $624-640/mt ex-works. Over the past week, the realistic HRC prices in the domestic market in Turkey have rolled back to $700-725/mt ex-works from the earlier targeted $710-730/mt ex-works. Despite all this, market players do not expect a collapse in deep sea scrap quotations, Turkey’s import scrap market is still fluctuating in a narrow price range.


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