Turkey’s import scrap market may have hit the bottom as of December 11, with the new deals surfacing in the market being closed at higher price levels. This has not come as a surprise for most market players, especially the sellers who have been resisting further price cuts or the prices in the most recent scrap deals.
An Izmir-based mill has closed the deals in question. The first one was from the US with HMS I/II 90:10 scrap at $348.5/mt CFR and shredded and bonus grades at $365.5/mt CFR. With the traditional $20/mt gap between HMS I/II 80:20 scrap and shredded, benchmark ex-US HMS I/II 80:20 scrap prices are indicatively at $345.5/mt CFR, $3.5/mt higher than the most recent ex-US deal. The second deal was done from the Netherlands, with HMS I/II 80:20 scrap standing at $333/mt CFR. The price remains stable as compared to most recent confirmed deal, though market sources think there are unconfirmed silent deals done at around $330/mt CFR. “This ex-Netherland deal means $330/mt CFR for ex-EU scrap has raised no interest among buyers,” a seller of European and ex-US scrap commented.
Currently, the gap between ex-US and ex-EU HMS I/II 80:20 scrap stands at $12.5/mt. SteelOrbis considers this gap to be high, which may mean European scrap prices have room to increase to catch up with the ex-US prices. As a result, SteelOrbis will revise its ex-Baltic HMS I/II 80:20 scrap price up by $5/mt for now to $341.5/mt CFR in the absence of a new deal. Several sources among scrap suppliers think prices have more room to increase, with the general view being that prices would increase by $5-10/mt, before the abovementioned deals surfaced. “We have hit the bottom. Undisclosed deals have also had a part in this recovery of prices. Turkish mills have returned to the market this week, making inquiries for January. Their need for cargoes to be shipped in the first half of January have also had an impact on sellers’ stance on resisting lower levels,” a seller commented. Another seller stated, “December is a short month. With Turkish mills seeking cargoes and sellers taking a step back, a price correction was inevitable. I do not mean we expect a huge price surge from the recent levels, but up $10/mt seems accurate for now.” “The Europeans have not accepted prices below $330/mt CFR Turkey. US-based sellers have started to increase their offer prices to Turkey lately. Yet, we do not see an acceleration in scrap trading,” one European scrap seller commented. Another European scrap supplier said deep sea scrap prices may move up slightly by $5-10/mt before December ends, adding, “We needed a positive push for deep sea scrap prices to hit the bottom. China may have just provided that.” China recently announced a relaxed monetary policy. President Xi said that the nation needs to take proactive steps to stimulate growth and stabilization. Also, the Syrian civil war which started in 2011 seems to be ending with a change of government. The shares of Turkish steel and cement companies have increased in value on the stock market after the collapse of Bashar Al-Assad’s government.