In a new ex-US scrap deal, Turkey’s import scrap market has plunged by $8.5/mt. While some market sources think that prices have hit the bottom in this deal, others are not so sure that prices will not drop below the current levels.
SteelOrbis has learned that the ex-US booking in question was done by a mill in the Marmara region for HMS I/II 80:20 scrap at $360/mt CFR, and shredded and bonus grades at $380/mt CFR. Some market sources say that the cargo will be shipped in early September, though this information was not confirmed by the buyer or seller by the time of publication. This price is $8.5/mt lower than the previous levels. Some market sources still report that no other ex-US supplier is willing to cut its price to this level. Almost all US-based suppliers are out of the market saying that they have been aiming for $370/mt CFR Turkey up to now. Their current pricing strategy will be watched closely, though $370/mt CFR now seems unlikely.
Also, there is an ex-Baltic transaction reported to have been done by the same buyer, with the HMS I/II 80:20 scrap price standing at $360/mt CFR. This level is $6/mt lower than the previous ex-Baltic booking done late last week.
Due to the ex-US deal confirmed today, August 21, SteelOrbis has revised all its prices accordingly. Considering the traditional gap between ex-EU and ex-US scrap prices, ex-EU HMS I/II 80:20 scrap prices have been cut to $350-355/mt CFR, down $9.75/mt. Meanwhile, ex-Baltic scrap prices have been revised to $360/mt CFR, down $6/mt. A seller of European and ex-US scrap says that the current levels may be the bottom, commenting, “I am not sure that we will hear another ex-US scrap transaction at this level again. However, an upward correction is also unlikely now. We may stay at the current levels for a while. Turkish mills may think the current levels are attractive.” Another European scrap seller said that, with the current exchange rates, Europeans cannot lower their prices to $355/mt CFR. “The average collection cost of European scrap suppliers does not give much room to sellers. Also, I do not expect costs to drop significantly in the coming period. Hence, I do not expect people to sign contracts amid this expectation,” the seller commented. The seller said he believed we will not hear more ex-US deals at $360/mt CFR, adding, “I think the margin between ex-EU and ex-US scrap will narrow. Ex-US deals can be done at around $363-364/mt CFR. The Europeans will try for $360s/mt CFR.” Turkey’s need for cargoes to be shipped in September is on the low side, around 10-12 at most due to the previous import billet orders. As a result, no significant upward push will be seen in the market even if prices hit the bottom.