Having already decreased by $3.5/mt on average since the beginning of the month, deep sea scrap prices in Turkey have collapsed in ex-US and ex-UK bookings done this week. The downward trend has not come as a surprise, though the likely extent of further price declines is not clear.
SteelOrbis has learned that an Iskenderun-based producer has concluded an ex-US deal for HMS I/II 80:20 scrap at $353/mt CFR, with shredded and bonus grade scrap at $373/mt CFR, for shipment in December. The price has indicated a $7.5/mt fall for HMS I/II 80:20 grade.
In addition, an ex-UK transaction has been done today, November 20, by another Iskenderun-based producer for HMS I/II 80:20 scrap at $340/mt CFR, with the total tonnage confirmed as 23,000 mt. This is the second transaction done by the same mill over the past six days, with the previous one having been closed at $350/mt CFR for the benchmark HMS I/II 80:20 scrap. Accordingly, some market players believe the average price should be taken into consideration instead of the $340/mt CFR recorded in today’s booking. There is also a rumor about an ex-Germany cargo being bought at $344/mt CFR Turkey, though the details are not clear at the time of publication. SteelOrbis believes that the ex-UK booking confirmed today will exert significant pressure on the overall import scrap prices. Under the current circumstances, SteelOrbis has revised its ex-Europe reference scrap prices to $340-345/mt CFR, cutting them by $9/mt.
Negative sentiment is gaining ground in Turkey. While some market sources think that deep sea scrap prices have settled at around $345-350/mt CFR after the above deals, others have voiced their expectations of a further price decline. One scrap seller said prices will settle below $340/mt CFR, while another scrap supplier stated that $340/mt CFR may be the bottom. A German-based scrap sub-collector voiced €285/mt DAP for export yards’ bids during collection, with prices around €290/mt DAP disappearing from the market. “German [producers] have almost stopped. December will be a dead month in terms of domestic scrap trading. We have not earned much this year, and still sub-collectors continue trading with export yards. But we are not increasing our inventory levels, contrary to previous years. We prefer to sell what we buy since there are too many variables in the global market,” the source added. However, Turkish mills report that they are also receiving billets and slabs from their previous contracts and are in no rush to slow down the declines observed in scrap prices. Demand in the local rebar market is also declining, with winter weather conditions starting to be felt in southern Turkey. “Everyone is doing back-to-back transactions, not just rebar traders, but also construction sites,” a rebar trader located in Turkey’s Marmara region commented. Domestic rebar prices remain soft in Turkey. The workable rebar prices have fallen to $590-595/mt ex-works in the Marmara and Izmir regions, including Icdas A.S., versus $600-610/mt a week earlier. Currently, ex-Turkey rebar prices vary at $575-580/mt FOB, versus $580-590/mt FOB last week, for December shipment. A few mills are aiming to keep their export prices at $590/mt FOB, while this seems somewhat difficult to achieve under the current market conditions.