As the positive sentiment in Turkey’s import scrap market continues, deep sea scrap prices are maintaining their upward trend. The main question is over the sustainability of the uptrend, with not all players convinced that it will continue in the long run.
SteelOrbis has learned that an ex-US scrap deal has been done by an Izmir-based producer with the HMS I/II 80:20 scrap price at $385/mt CFR and with shredded and bonus grade scrap at $405/mt CFR, for shipment in November. According to some sources, the gap between shredded/bonus grades and HMS I/II 80:20 scrap is wider, currently standing at $23-28/mt. As a result, the SteelOrbis ex-US HMS I/II 80:20 reference price has been raised by $8/mt as of today, October 4.
Market sources think that European scrap prices may also move up towards the $380s/mt CFR, following the ex-US deal in question. SteelOrbis has revised its reference price for this grade to $375-380/mt CFR due to the lack of a new deal. The SteelOrbis ex-Baltic HMS I/II 80:20 reference price has been adjusted to $382-385/mt CFR.
Expectations for Turkey’s deep sea scrap prices are mixed. Some sellers believe there is room for another $5-10/mt increase in prices. “Collection prices in the EU and the Baltic region are moving up too. For months now, there has been significant pressure on Turkey’s import scrap prices. Current levels, though, are becoming acceptable to sellers due to our inventory costs which are higher than the recent collection prices. When collection bids were down, there was very little flow to yards,” a European scrap supplier commented. The most recent collection price in the EU was at €295/mt DAP Amsterdam. As of today, this price has increased to €300/mt DAP Amsterdam. A German supplier said collection prices of European export yards may rise to €305-310/mt DAP in the coming week. Sources also report that collection prices in the Baltic region have increased by $20/mt. A Baltic-based scrap supplier said that within ten days deep sea scrap prices from their region may be at around $390-400/mt CFR Turkey. Meanwhile, other sources disagreed, stating that China should be monitored closely. “This is a short-term recovery, both for scrap and steel demand. China’s decision about its own capacity utilization rates will be decisive in the end. And things change quickly in China,” one supplier said. Another market players stated, “Steel demand in the EU is not recovering, industrial production rates are still on the low side. Even with the increases observed in Turkey’s deep sea scrap prices, producers in other regions are reluctant to accept similar prices. China’s rising prices are also only on paper. We will see the reality next week. I believe Turkey is close to the peak in terms of the deep sea scrap segment.” SteelOrbis observes that small and medium-scale producers in Turkey are taking their time, also waiting to see Chinese futures prices next week. However, it is also reported that the larger buyers in Turkey are making inquiries. Even given the reluctance shown by some Turkish buyers, no downward trend in the scrap segment is expected in the coming week. Turkey’s domestic rebar prices are also moving up, while the price margin between scrap and rebar is widening. Turkish producers’ domestic rebar prices today stand at $620-635/mt ex-works and higher. Market sources believe domestic rebar prices will increase further in the coming week.