DAILY STEEL SCRAP: Weak rebar demand holds back Turkish mills

The Turkish steel mills have been staying away from deep-sea scrap purchases because of weak rebar sales and a sufficiency of scrap stocks, market participants told Fastmarkets on Tuesday June 22.

The most recent deals were heard on June 15, when two United States-origin cargoes were sold.

A mill in the Marmara region bought those cargoes, which comprised HMS 1&2 (80:20) at $500 and $501 per tonne, plus shredded and bonus material at $520 per tonne.

The steelmakers have been struggling with weak rebar sales in both the domestic and export markets in the past week, which prevented them from booking more scrap.

“The scrap market has been very quiet recently. There are a lot of deep-sea scrap offers available but most of the mills have already booked enough cargoes for July. Recently, the steelmakers have only been buying scrap when they sell rebar,” a Turkish mill source said.

“The scrap suppliers in the US have been pushing for $530 per tonne cfr [for HMS 1&2 (80:20)] in recent weeks because of their good domestic demand and some sales concluded to Latin America,” he added. “However, they recently sold at $500 per tonne and I heard that some are ready to sell at $490 per tonne now. It seems that prices could go below $480 per tonne soon.”

In the meantime, the shortage of shredded material has continued, widening the price gap between HMS 1&2 (80:20) and shredded scrap to $20 per tonne from the more traditional gap of $5 per tonne, market participants said.

“The suppliers in the US have not been selling many cargoes to Turkey in the past three months,” a mill source said. “This has created a shortage of shredded material in Turkey, because the US is the main supplier of [that grade]. However, the HMS 1&2 (80:20) supply in the US is increasing, and Turkey is the major buyer of the material. I think shredded scrap prices will slowly get back to normal levels soon, as long as the US merchants sell composite cargoes to Turkey.”

As a result of the lack of fresh trading activity, the daily scrap indices remained stable on June 22.

Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, was calculated at $500.26 per tonne on Tuesday, unchanged day on day.

And the daily index for steel scrap, HMS 1&2 (80:20 mix), US origin, cfr Turkey, was also flat at $506.44 per tonne, leaving the premium for US material over European scrap stable on June 22 at $6.18 per tonne.

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