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China will remove the export tax rebate for some steel products from May 1, the Ministry of Finance said on Wednesday April 28.
The news boosted the demand for steel, and particularly steel billet, across the region, and that triggered the rush to book more scrap.
A steel mill in the Iskenderun region booked a European cargo, comprising 20,000 tonnes of HMS 1&2 (80:20), 8,000 tonnes of shredded, 10,000 tonnes of bonus and 2,000 tonnes of busheling at an average price of $453 per tonne cfr.
The price of HMS 1&2 (80:20) was estimated at about $448 per tonne cfr by market participants.
As a result, the daily scrap indices increased sharply at the end of the week.
Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, was calculated at $448.47 per tonne on Friday April 30, up by $21.87 per tonne day on day.
And the daily index for steel scrap, HMS 1&2 (80:20 mix), US origin, cfr Turkey, was calculated at $454.44 per tonne, also up by $21.87 day on day, leaving the premium for US material over European scrap unchanged at $5.97 per tonne.
Four further cargoes from Thursday came to light at the end of the week.
A steel mill in the Marmara region booked a Baltic Sea cargo, comprising HMS 1&2 (80:20) at $435 per tonne and bonus at $445 per tonne cfr, although the breakdown of the cargo was unclear.
Another steel mill in the Iskenderun region booked another cargo from the same Baltic Sea supplier later in the day, comprising 23,500 tonnes of HMS 1&2 (80:20) at $440 per tonne, 5,000 tonnes of shredded at $445 per tonne, 2,500 tonnes of bonus at $450 per tonne and 1,700 tonnes of busheling and 2,300 tonnes of rail at $455 per tonne cfr.
A third steel mill in the region booked a European cargo, comprising 20,000 tonnes of HMS 1&2 (80:20), 10,000 tonnes of shredded and 10,000 tonnes of a mixture of plate & structural (P&S) scrap and HMS 1 at an average price of $433.50 per tonne cfr.
The same mill had also booked a UK cargo HMS 1&2 (80:20) on Thursday at $435 per tonne cfr.
Market participants said the strong demand coming from Asia was the main reason behind the latest rise in prices.
“The buyers in Asia were like hungry whales yesterday. They were trying to buy billet from everywhere, including Turkey and the CIS. We stopped offering billet for export, but we will probably offer material at $640-645 per tonne fob next week,” a Turkish mill source said.
A steel mill in the Iskenderun region was heard selling billet to local buyers at $615 per tonne ex-works on Thursday, but then sold material at $625 per tonne ex-works on Friday, Fastmarkets understands.
Fastmarkets’ weekly price assessment for steel billet, domestic, exw Turkey was $600-605 per tonne on Thursday April 29, up from $590-600 per tonne ex-works week on week.
“The only reason for the increase in prices was the tax rebate cancellation in China. All the buyers came to the market at once. Besides, the sharp increase in the Covid-19 cases in India has disturbed billet supplies in Asia, which further helped the increase in prices,” the Turkish mill source added.
Scrap suppliers immediately withdrew their offers from the market, following the sharp rise in prices and demand.
Turkish deep-sea scrap imports have amounted to nine cargoes so far this week, totalling more than 300,000 tonnes.
Four cargoes were recorded on April 27-28 and scheduled to be shipped in June.
A steel mill in northern Turkey booked 22,000 tonnes of HMS 1&2 (80:20) from the Baltic Sea at $432 per tonne cfr.
A steel producer in the Iskenderun region booked a second Baltic sea cargo of 17,000 tonne of HMS 1&2 (80:20) at $426 per tonne cfr.
Another mill in the Iskenderun region booked a US cargo, comprising HMS 1&2 (80:20) at $432 per tonne, shredded at $437 per tonne and plate & structural (P&S) scrap at $442 per tonne cfr.
And a steel mill in the Marmara region booked a Baltic Sea cargo consisting of 25,000 tonnes of HMS 1&2 (80:20) at $427.50 per tonne cfr.