Turkey’s import scrap segment has continued its soft trend. While scrap sellers believe the downtrend of scrap prices may come to a halt at the current levels, some Turkish steel producers still think a further small decline in scrap prices may encourage mills to focus on scrap purchases once again.
SteelOrbis has learned that an ex-UK deal has been done by an Izmir-based producer for HMS I/II 80:20 scrap at $355/mt CFR down compared to bookings done earlier in the month. The total tonnage of the cargo is 22,000 mt. There are rumors of two more ex-UK transactions circulating in the Turkish scrap market today, August 22, and the price of benchmark HMS I/II 80:20 scrap in those deals is also $355/mt CFR. One of the rumored deals was denied before the time of publication, while the other one has neither been confirmed or denied. SteelOrbis has revised its ex-EU HMS I/II 80:20 scrap price to $355/mt CFR for now, from the estimations of $350-355/mt CFR based on ex-US bookings.
Today, a source at a major Turkish mill commented that scrap prices may be maintained at the current levels for a short time, adding, “We are monitoring the news from China. If the local Chinese steel market recovers and if iron ore prices move up, then this will certainly be reflected in scrap and long steel prices. If the scenario is reversed, billet imports into Turkey will continue along with lower capacity utilization rates, meaning more pressure on scrap and finished steel prices.” Another contact at a Turkish producer mentioned that they are interested in the current scrap price levels, this being the third source saying that the existing scrap price levels are attracting interest. There is significant downward pressure on collection prices in Europe. Since European scrap suppliers’ average stock costs are on the high side as compared to today’s collection prices, the suppliers’ principal aim is to lower their costs. A European scrap seller commented, “Collection prices adapt in one way or the other. We always talk about the DAP port prices, but the competition between sub-collectors is tighter and this will impact the collection price.” A German scrap sub-collector said his expectation for September is for a drop of €20/mt in the scrap collection prices, adding, “The general expectation here is for a €20-30/mt cut in prices in September. I believe this is natural. Prices have already declined by €15-20/mt in August and there is no great demand. The only question in our mind is what the volume of scrap generated at those price levels will be.”