Turkish deep-sea scrap import prices edged up on Tuesday after firm offers from the Baltic Sea region, although many mills were looking to achieve further rebar sales in the export and domestic markets before purchasing more scrap, sources said on March 30.
Since then, the Baltic Sea suppliers raised their offer prices to $430-435 per tonne cfr, but the Turkish mills were only looking to pay below $420 per tonne.
The main driver behind the rising scrap prices was the rebar export sales last week, when at least 200,000 tonnes of Turkish long steel sold into Southeast Asia.
“It seems the scrap prices will increase a little bit further, but we should see more deals first,” a trading source told Fastmarkets.
“The market revived with the rebar export sales to Southeast Asia last week, but [that hasn't] continued so far, but mills will want to secure more sales before booking more scrap,” a Turkish source said.
“There are offers available at $430-435 per tonne cfr from the Baltic Sea region, but the US suppliers are currently not offering anything. The mills want to buy at $420 per tonne, but this does not seem workable at the moment. But I expect [to see] prices to go up to $450 per tonne if the bookings continue,” another trading source said.
The weakening Turkish lira has proved to be an obstacle for the steel mills since last week's collapse.
The Turkish lira weakened sharply at the beginning of last week following the surprise decision by Turkey's president, Recep Tayyip Erdogan, to sack the central bank chief, Naci Agbal, and appoint Sahap Kavcioglu as governor. Kavcioglu is a finance specialist and is former deputy leader of Erdogan’s own AKP political party,
The Turkish lira was trading at 8.144 lira to $1 on Tuesday March 30, compared with the 7.200 lira to $1 on March 22, according to Oanda.com.
The weakening of the Turkish lira against the US dollar led to a rise in finished steel prices because mills in Turkey buy most of their raw materials in US dollars before selling them to the domestic market in the local currency.
“Turkish steel mills retreated from the market, as the lira continued to lose ground against dollar. The bids for deep-sea scrap are $420 per tonne and below for the moment. It seems both buyers and sellers are less optimistic,” a Turkish mill source said.
As a result of the fresh offers, bids and assessments collected by Fastmarkets, the daily scrap indices edged up on Tuesday March 30.
Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was calculated at $418.27 per tonne on Tuesday, up by $1.40 per tonne.
And the daily index for steel scrap, HMS 1&2 (80:20 mix), US origin, cfr Turkey was $427.63 per tonne, also up by $1.40 per tonne day on day, leaving the premium for US material over European scrap at $9.36 per tonne on March 30.