DAILY STEEL SCRAP: Turkish mills pause deep-sea bookings ahead of 17-day Covid-19 lockdown
Turkish steelmakers took a break from deep-sea scrap purchases to monitor conditions in the finished steel markets on Thursday April 29, ahead of a 17-day coronavirus lockdown, sources told Fastmarkets.
The most recent deep-sea trade was recorded on Wednesday April 28, when a steel mill in northern Turkey was heard booking 22,000 tonnes of HMS 1&2 (80:20) from the Baltic Sea at $432 per tonne cfr.
That deal led to a $1-per-tonne increase in the daily scrap indices on Wednesday.
The short-term recovery in the domestic long steel markets and firm demand in the export markets have been supporting Turkish steel mill efforts to book more scrap, but Turkey is starting a full lockdown to curb the spread of the latest surge in Covid-19 cases starting on Thursday evening, with domestic trade expected to suffer as a result.
The lockdown is expected to be lifted on May 17.
The measures coincide with the remainder of the holy Islamic month of Ramadan and the three days of the Eid festival.
“Unfortunately, the domestic market is still weak and it will hardy recover with the current interest rates in Turkey. Although long steel exports have increased by around 20% year on year so far in 2021, that is not enough to compensate for the losses in the domestic market,” the chief executive at a major Turkish steelmaker told Fastmarkets.
“There is no certainty [about] upward movement in the scrap prices despite all efforts,” he added.
However, a Turkish trading source was still bullish.
“There has been a recovery in domestic long steel demand, but long steel export sales to Southeast Asia and Latin America are really strong. And these [trade flows] could lead to an increase in scrap prices,” he said.
As a result of lack of fresh trading activity in the deep-sea scrap import markets, the daily scrap indices remained static on April 29.
Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, was calculated at $426.60 per tonne on Thursday, unchanged day on day.
And the daily index for steel scrap, HMS 1&2 (80:20 mix), US origin, cfr Turkey, was calculated at $432.57 per tonne, also flat day on day, leaving the premium for US material over European scrap at $5.97 per tonne.