DAILY STEEL SCRAP: Mills continue to pay higher prices for deep-sea scrap
Turkish steel producers continued to book deep-sea scrap for July shipments at higher prices on Monday May 24 even as market sentiment turned negative, sources told Fastmarkets.
A steel mill in the Iskenderun region booked a European cargo comprising 19,000 tonnes of heavy melting scrap 1&2 (80:20), 11,000 tonnes of shredded, 8,000 tonnes of bonus and 2,000 tonnes of busheling at an average price of $516 per tonne cfr. The HMS 1&2 (80:20) price of the cargo was calculated at around $510-510.50 per tonne cfr.
Another steel mill in the same region booked a United Kingdom cargo consisting of HMS 1&2 (80:20) at $513 per tonne and shredded at $528 per tonne cfr. The cargo breakdown was not clear at the time of publication.
These deals compared with the most recent cargo sold on Thursday May 20, when a steel mill in the Iskenderun region booked a Baltic Sea cargo at $507.50 per tonne cfr on HMS 1&2 (80:20) basis.
Baltic Sea-origin HMS 1&2 (80:20) usually trades at a premium over European- and UK-origin material.
The daily scrap indices rose at the start of the week on the new deals.
Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was calculated at $512.78 per tonne on Monday, up by $6.25 per tonne from Friday’s index.
The corresponding daily index for steel scrap, HMS 1&2 (80:20 mix), United States origin, cfr Turkey was $517.36 per tonne on Monday, also up by $6.25 per tonne, leaving the premium for US material over European scrap at $4.58 per tonne.
Market participants were, however, cautious about the short-term outlook for prices due to falling iron ore prices in China over the past week.
Iron ore prices fell further on Monday amid weakening sentiment, following reports that Chinese officials had held further discussions about how to control high commodities prices.
Fastmarkets’ daily index for 62% Fe fines, cfr Qingdao was calculated at $192.42 per tonne on Monday, down from the $217.77 per tonne a week ago.
“I do not expect Turkish scrap import prices to continue increasing. [Iron ore] prices in China and therefore billet prices are going down. The mills paid higher prices for scrap with panic decisions, but the market is not good. Billet prices for China are too high now. Some previous deals can even be cancelled,” a Turkish mill source said.
“The sentiment in the domestic long steel market in Turkey is also negative due to high prices. The buyers struggle to pay current rebar prices,” the mill source added.