DAILY STEEL SCRAP: Market holds out for rebar demand recovery to support

Turkish steel mills remained largely silent in the deep-sea scrap import markets due to continued sluggish finished steel demand in both domestic and export outlets, market participants told Fastmarkets on Wednesday June 2.

June 2, 2021

By Cem Turken

Turkish steelmakers have been focusing on finished steel sales in the recent weeks in lieu of demand in Asia, while customers in the domestic market have been struggling with high prices.

“There is no demand in the Asian market for the moment. Everybody is waiting for China’s decision on imposing an export tax on steel products, which will limit its exports to Asia. If that happens, countries like Turkey, India and Russia will share that market and prices will increase. But, until then, Turkish exports will be weak,” a Turkish mill source said.

“Domestic steel prices are high for Turkish customers because the lira has been weak for a long while. Contractors are still unwilling to pay 7,000-lira levels for rebar. If they are convinced that this is the new price level and resume their buying, the market could improve,” another mill source said.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, exw Turkey was 7,150-7,200 lira ($839-845) per tonne on Thursday May 27, down from 7,300-7,350 lira per tonne in the previous week.

Meanwhile, scrap prices have been falling slightly, according to market sources.

“I think the acceptable price level for Europe-origin HMS 1&2 (80:20) is at $490-493 per tonne cfr. The Baltic Sea-origin HMS 1&2 (80:20) will be priced at $495-497 per tonne cfr, while the same material should be priced at $500-505 per tonne cfr from the US,” the first mill source said.

A deal for a UK cargo came to light on Wednesday: a steel mill in the Marmara region booked the cargo, comprising HMS 1&2 (80:20) at $505 per tonne and shredded at $520 per tonne cfr. It was sold late last week or at the beginning of this week, market participants reported.

As a result of fresh assessments gathered, the daily scrap indices inched down on Wednesday.

Fastmarkets calculated the daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey at $495.27 per tonne on Wednesday, down by $1.76 per tonne day on day.

And the daily index for steel scrap, HMS 1&2 (80:20 mix), US origin, cfr Turkey was down $1.35 to $501.22 per tonne on June 2.

This put the premium for US material over European scrap at $5.95 per tonne on June 2, compared with $5.54 per tonne on June 1.