Turkey’s import scrap market has been silent lately in terms of new transactions or even negotiations. The main reason is that the large steel producers have been focusing on import billet purchases since, based on the current prices, usage of semis for rebar production is at least $35-45/mt more advantageous compared to usage of imported scrap.
The latest import scrap deal which surfaced in the market earlier this week is reported to have been closed a number of days ago for an ex-France cargo of HMS I/II (80:20) at $386/mt CFR and for shredded and bonus at $411/mt CFR. The buyer is located in the Izmir region. “It was closed last week, maybe even earlier, and so there is no impact on the market so far,” a source said. The SteelOrbis reference price for ex-Europe HMS I/II (80:20) scrap has remained unchanged at $382.5-388/mt CFR.
Scrap suppliers report there are hardly any inquiries from Turkish mills at the moment for import scrap, due to the heavy restocking of import billet recently. According to SteelOrbis’ evaluations, over the past two or three weeks China alone sold around 350,000-400,000 mt of billet to Turkey, while altogether with other Asian and Black Sea origins the total volume should be exceed 500,000 mt. The earlier booked cargoes are for August shipments, but most are for September shipments and only the latest couple of them were for shipment in the first half of October. The deal prices for billet started at $509-520/mt CFR for various origins, while the most recent cargoes were booked at $485-490/mt CFR from China, with the latest offers standing at $490-495/mt CFR, for shipment in the second half of October.
Given the plentiful billet import bookings done earlier, most market sources expect there may be a couple of additional cargoes booked at similar or maybe slightly higher prices from China. “However, since we are now talking about shipments in the second half of October and for arrival at the end of November, most Turkish mills may not choose to increase their risks further,” a trader told SteelOrbis.
At the same time, Turkish mills, according to players’ evaluations, have at least 10 days or so to wait before new scrap purchases and to put pressure on suppliers. “There is a feeling that some of the Baltic-based suppliers may agree to sell at $385/mt CFR, but overall for Europe it would be hard to drop prices due to the high scrap collection price levels. I am afraid they would be selling at a loss,” a market source said. Moreover, the pressure on scrap suppliers to Turkey is expected to increase further in September and October when the billet cargoes will be arriving and Turkish mills will carry billet stocks to substitute part of their demand for raw material.