Turkish steel mills have been mostly silent in the past week, struggling with the shortage of graphite electrodes and increasing prices for ferro-silicon.
The mills were said to be looking for opportunities to book billet instead of scrap, but billet prices were also at levels that were unacceptable to the producers, sources said.
Turkey has booked only two deep-sea cargoes in the past seven days, with lower prices, as their supply was also said to be strong.
A steel producer in the Iskenderun region booked a US cargo, comprising 15,000 tonnes of HMS 1&2 (80:20) at $355 per tonne, 10,000 tonnes of shredded at $360 per tonne and 15,000 tonnes of P&S at $367 per tonne cfr, on Friday September 8.
A steel producer in the Iskenderun region booked a US cargo, comprising 10,000 tonnes of HMS 1&2 (80:20) at $350 per tonne, 12,000 tonnes of shredded at $355 per tonne and 3,000 tonnes of bonus at $360 per tonne cfr on September 13.
Market participants were expecting further price decreases, as the oversupply continues.
“Scrap supply is strong. I think we will see [a price of] $345 per tonne cfr [for USA-origin HMS 1&2 (80:20)] soon,” a trading source said.
“I think the US HMS 1&2 (80:20) price will be at around $345-347 per tonne cfr, if we hear of any transaction this week. But the prices could correct downward to $340-345 per tonne cfr next week, if no deals are concluded this week,” a Turkish mill source said.
“It is very possible [for there to be] a correction down to $335 per tonne cfr, as the prices went up to $354 per tonne from $327 per tonne within only five deals. It will cool off as quickly as it increased,” he added.
The US bulk ferrous scrap export market has awakened, with confirmed sales pushing prices up on the West Coast while East Coast scrap values fell.
On the East Coast, hopes that HMS scrap grade prices would reach $360 per tonne did not were not realised, as sellers accepted lower prices into Turkey.
An exporter to Turkey was not concerned with the lower sales and did not believe that the market would see a significant correction.
“There is still good demand. There are 15 cargoes available, but there are 15 cargoes needed,” the exporter said. “If the market was that weak, they wouldn’t be buying [at prices] down a couple dollars, but [they would be] holding out.”
On the West Coast, an exporter sold twin cargoes totalling 93,000 tonnes of HMS 1&2 (80:20) at $351 per tonne to the same consumer.
The deal marked the exporter’s first sale since early August, when it sold exclusively shredded scrap to the same consumer for $335 per tonne.
Taiwan’s prices for imports of containerised HMS-grade ferrous scrap have declined over the past week, with deals going through at lower prices as local buyers prefer domestic scrap because there is weak demand for rebar in their home market.
Metal Bulletin’s price assessment for imports of USA-origin HMS 1&2 (80:20) into Taiwan was $285-295 per tonne cfr for the week ending Friday September 15, down by $5 from $290-300 per tonne in the previous week.
Deals for USA-origin HMS 1&2 (80:20) were heard between $285 and $293 per tonne cfr Taiwan.
“I think the import HMS 1&2 (80:20) prices have passed their peak, so they will be going down from now on,” one trader said.
“Domestic scrap is very competitive, so we have imported some [material] but have also been buying at home,” a source at a Taiwanese steelmaker said.
Meanwhile, domestic demand for rebar in Taiwan was said to be still weak.
Some Taiwanese steel mills have been reported using billet exports to offset the weak demand for rebar at home.
This week, Feng Hsin Steel was reported to have exported billet for the first time since 2008. The producer was said to have sold 15,000 tonnes of billet at $520 per tonne fob Taiwan.
Prices for ferrous scrap imported into India in containers declined this week due to a drop in finished steel prices and a weakening of global scrap markets.
After two weeks of stability, Metal Bulletin’s index for containerised shredded scrap imports into India moved down to $333.47 per tonne cfr Nhava Sheva on Friday, down by $7.16 per tonne compared with $340.63 per tonne cfr last week.
Indian steelmakers reduced both their buying activity and their bid prices for shredded and HMS 1&2 (80:20) material this week, in line with falling international scrap markets.
“Everyone is waiting and watching to see how prices settle. No new container offers have been received yet [so] let’s see [what will happen] next week,” one trader said.
A second trader listed five reasons for why scrap demand at Indian steelmakers has fallen. One was the availability of cheap direct reduced iron (DRI) as an alternative raw material. Another was the limited effects of the global scarcity of graphite electrodes because the most common steel production installation in India is the induction furnace, which does not use electrodes.
Large gaps have opened up between the buy- and sell-side valuations for the material, according to sources.
Bids from buyers fell to $310 per tonne cfr Nhava Sheva, while sellers’ offers were $340-345 per tonne cfr Nhava Sheva for UK-origin material.
“Everybody got material at very high prices, so there’s no point asking for less,” a third trader said.
Although prices dropped this week, most sources said that the Indian import scrap market was unlikely to weaken significantly.
“Prices shouldn’t go down any further in India as there’s no room to move down more,” one seller said.
Turkey’s domestic scrap prices fell at the beginning of the week, in line with the strengthening Turkish lira and falling imported scrap prices.
Nadia Popova in Moscow, Lisa Gordon in New York and Lee Allen in London contributed to this report.
Turkish steel producers have managed to get lower prices from the US East Coast this week, taking the advantage of strong supplies, while Taiwanese and Indian scrap import prices followed a similar trend.