Since the beginning of the current week, Turkey’s import scrap market has given negative signals. As Turkey’s appetite for deep sea scrap for September shipment remains weak, the deals closed in the first half of August all indicated significant prices declines. A deal disclosed on August 13 was not an exception.
Meanwhile, another sharp decrease was reported in ex-EU scrap prices at the end of the week on August 16. An Izmir-based producer is reported to have closed an ex-Netherlands booking with the benchmark HMS I/II 80:20 scrap price standing at $364.5/mt CFR, down from the previous ex-Netherlands deal closed at $368.5/mt CFR earlier in the week. While this information was not confirmed by the buyer or the seller at the time of publication, most market players in the market believe that the deal was in fact signed. Additionally, a report of an ex-UK booking is now circulating in the market, with the HMS I/II 80:20 price at $366/mt CFR Izmir. While no details were shared about this deal, some sources report that it is only a top-up of 10,000 mt. SteelOrbis has revised its prices for ex-EU HMS I/II 80:20 scrap to $364.5-366/mt CFR for now, down by $3.25/mt as compared to earlier this week. The total decline observed in the general import scrap price range in Turkey since the beginning of August is now $12.25/mt, with ex-US and ex-Baltic scrap prices adjusted in line with the news coming from the European scrap segment.
The current price level standing at $369.75/mt CFR on average was last recorded in July 2023. Turkey’s import scrap market had managed to remain above $375/mt CFR Turkey during most of 2024, until now. Scrap collection prices in the EU were at around €305-310/mt DAP earlier this week, with several market players being out of the market due to the holidays. However, a German sub-collector has reported that bids received from export yards have declined below these levels to €295-300/mt DAP. Two sub-collectors have reported that these levels are not acceptable and so they are inclined to wait for the holiday season to end. Import billet prices have retained their importance for Turkey, with the Chinese billet market still on a downward trend. Two separate sources surveyed by SteelOrbis on August 16 both said that collection prices may have lost their leverage against the backdrop of the sluggish finished steel sales in Turkey. A source at a major Turkish mill said, “There will be cuts in Turkish mills’ capacity utilization rates - hidden or not, I do not know, but there is no way to make medium-term plans for inventories. We are in no position to make estimations for two or three months later.”
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved down by 1.27 percent week on week. The prices are now 4.46 percent lower month on month in the deep sea segment, with prices being in the range of $364.5-375/mt CFR.
US domestic Midwest scrap prices in the Ohio Valley and in the Northeast for August settled at the beginning of the week. As demand for finished steel remains weak, market insiders said US scrap prices are now expected to be lower in September, unless market fundamentals improve, which could occur with the much-anticipated rate cut by the Federal Reserve in September. Short of the US Fed rate cut though, market fundamentals remain little changed. The outlook for August scrap flip-flopped, most said later, because bad economic reports on interest rates, jobs and unremarkable construction spending overshadowed the higher scrap expectation. And as the global markets continue to show weakness, insiders added that abundant billet supply is further reducing demand for US scrap exports.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap has increased by MXN 100/mt ($5/mt) over the past week to MXN 7,650/mt ($401/mt). Additionally, HMS I/II scrap prices have risen by MXN 200/mt ($10/mt) over the same period to MXN 5,800/mt ($304/mt).
The import scrap market in Vietnam has moved down over the past week. Meanwhile, South Korea has continued its slow demand for import scrap, with South Korean producers citing the lack of finished steel demand in the country. SteelOrbis has learned that offers for Japanese H2 scrap to Vietnam are currently at around $365-370/mt CFR, declining by $3/mt on the upper end. Domestic HMS I scrap prices in the southern part of South Korea are now at around $305/mt DDP producer, relatively stable as compared to the prices recorded on July 26.
Taiwan has not received Japanese scrap offers this week due to holidays in Japan, while ex-US scrap prices have declined week on week. Offers for ex-US HMS I/II (80:20) scrap in containers have declined to $338-346/mt CFR, from $345-350/mt CFR recorded last week. This decline is explained by the market’s reaction to the sharp fall seen in iron ore and billet prices. Due to the Obon holidays (August 13-16), Japanese suppliers of H1/2 (50:50) bulk scrap were out of the market.