Two relatively old deals in Turkey’s import scrap market have been disclosed today, August 31. The transactions indicate a more or less sideways movement for deep sea scrap. The silence in the market has mostly continued, with long steel prices holding their ground. However, the threat of production cuts by Turkish mills still exerts an influence, and, as one player stated, “It is time to decide what to do”.
SteelOrbis has learned that an ex-Netherlands deal was done by an Izmir-based mill last week, with HMS I/II 80:20 scrap standing at $388/mt CFR. This price is slightly lower than the previous average in ex-EU deals at $389.5/mt CFR Turkey, but is interpreted as being a sideways movement by market intermediaries.
The second deal was done from Venezuela to Izmir on Friday, August 26, with HMS I/II 80:20 scrap at $396/mt CFR, for prompt shipment. The price is similar to the lower end of prices in previous ex-US bookings. No further information was available about these two deals at the time of publication.
Still, the main factors impacting the market are the availability of scrap, ongoing logistics problems - mainly in the EU - and the lack of support from demand for Turkish steel. While SteelOrbis has learned that rainfall has started to be observed in the EU, no quick fix for logistics is foreseen. An EU-based player commented, “If there was enough scrap, prices would move down, but there is not.” European steelmakers are returning from the holiday, evaluating costs, with some even announcing their intention to increase their steel prices. “Their decision will reflect on the scrap segment,” a scrap seller commented, “but it is too early to say. There are forces from opposite directions in the market.” A Turkish long steel producer said that Turkey’s year-on-year fall in crude steel production amounted to 20 percent in July and is a clear enough indication supporting the idea that Turkish mills are slowing down their production. In the first seven months of 2022, Turkey’s crude steel production amounted to 21.6 million tons, dropping 6.9 percent from the same period last year, the data from Worldsteel showed. “Making a prediction is getting harder with each day,” a steel producer commented, “The world is slowing down. The energy costs and the reactions from European mills or from governments remain to be seen. Finding an equilibrium may take some time.” As uncertainties build up, the local Turkish rebar market also has low inventory levels. A trader commented that a potential cut or halt in production may end up in a shortage of material very quickly, especially for some dimensions.
In the short sea segment, Romanian HMS I/II 80:20 scrap prices are in the range of $370-375/mt CFR fixed in deals, down from the previous range of $375-377/mt CFR. For Italy, the workable levels for HMS I/II 80:20 scrap are at $380-385/mt CFR Turkey.