Turkey continues to buy deep sea scrap cargoes to complete its February shipments and so prices have moved up further. Five new deals have been disclosed to the market, most done on Friday, January 5.
An ex-US scrap deal was done by an Izmir-based Turkish producer for HMS I/II 80:20 scrap at $421/mt CFR and shredded and bonus grade scrap at $441/mt CFR. Hence, ex-US scrap prices moved up by $2/mt. However, today, an ex-Sweden deal was closed by a Marmara-based producer with HMS I/II 80:20 scrap standing at $425/mt CFR and shredded scrap at $445/mt CFR. Therefore, SteelOrbis will also revise its ex-US scrap price to $425/mt CFR.
Meanwhile, two ex-EU deals were closed on Friday. One was done by an Izmir-based producer for HMS I/II 80:20 scrap at $415/mt CFR and bonus grade at $435/mt CFR, while the second one was closed by another Izmir-based mill for 20,000 mt of shredded scrap and 20,000 mt of bonus grade scrap at $439/mt CFR. A third ex-Europe scrap booking was done by one of the Izmir-based steelmakers for HMS I/II 80:20 scrap at $418/mt CFR and shredded and bonus grades at $438/mt CFR. SteelOrbis’ ex-EU scrap reference price has moved up to $415-419/mt after these deals.
The workable levels for ex-Romania HMS I/II 80:20 scrap are currently at around 405s/mt CFR, with ex-Bulgaria HMS I/II 80:20 scrap being at around $400s/mt CFR.
The mood in Turkey has changed a little since Friday, some market sources report. While the news from the US about some domestic contracts being cancelled has raised questions about US-based suppliers next move, European suppliers believe this development will not have a big impact on the future trend of prices. Several sources report that the expectation of a fall in the local US scrap market has changed their own expectations and now they believe that the upward movement of scrap prices may be limited. On the other hand, some think the settling of prices in the US will have to be seen first before they voice a level. The euro-dollar exchange rate is undermining European suppliers’ competitive power against other scrap supplying regions. One major scrap supplier in the EU said, “Scrap is still undervalued, and scrap flow is not sufficient to support future demand.” Meanwhile, a US-based source commented that, due to the disruptions seen in the Red Sea and the risks involved, India is expected to look for ex-US bulk cargoes. Having said that, an ex-US scrap seller stated that the positive factors are fewer than the negative factors, and so deep sea scrap prices may stabilize. A source at a Turkish mill agreed, saying “We need another story for finished steel prices and sales to support higher scrap quotations.” A third source at a Turkish producer commented, “It will all depend on the pace at which Turkey buys. If everyone starts to look for cargoes, we all know quotations may move up to the previous peak of $425-430/mt CFR.” Most market sources agree that rest of Turkey’s deep sea scrap needs can be easily met by the sellers. As a result, deep sea scrap prices may stabilize or the pace of the uptrend may slow down in the coming round of bookings.