Turkey makes tentative return to US ferrous scrap export market

A Turkish mill in a region geographically unaffected by the earthquakes in the southeast of the country on February 6 made a return to the US ferrous scrap export market on Friday February 10

An East Coast exporter sold a cargo comprising an unspecified tonnage of an 80:20 mix of No1 and No2 heavy melting scrap priced at $418 per tonne CFR and shredded and bonus-grade material both priced at $438 per tonne CFR, Fastmarkets learned on Tuesday February 14.

The same mill purchased a second post-earthquake cargo from a separate US shipper on the East Coast on Wednesday February 15, in which HMS 1&2 (80:20) went for $413 per tonne CFR and shredded and bonus-grade material went for $433 per tonne CFR.

US deep-sea ferrous scrap export prices to Turkey have declined by an aggregate $11-13 per tonne in the wake of the earthquakes on February 6.

Prior to these fresh deals, an East Coast cargo including HMS 1&2 (80:20) priced at $424 per tonne CFR and shredded and bonus scrap at $444 per tonne CFR and a second in which shredded and bonus scrap at an average of $446 per tonne CFR were sold on January 31.

An additional seven global cargoes have been heard sold to the region in February so far, which, if confirmed, brings total cargoes to nine out of the original 20 cargoes expected for the month. These would be equivalent to a minimum of 270,000 tonnes, based on the lowest cargo capacity of 30,000 tonnes.

The seven mills in the area directly impacted by the earthquakes account for approximately 30% of the of the country’s total crude steel output and export; production is estimated at 35,000-40,000 tonnes per day.

At least four of these mills have declared force majeure in the wake of the earthquake, Fastmarkets has heard. The port of Iskenderun — a major import and export hub for steelmakers — suffered direct damage but has since been heard to be slowly resuming some activity on Tuesday February 14.

Cargoes destined for mills in the southeast of the country are expected to be diverted to other facilities; some affected mills have sister sites in the northern part of the country.

Deep-sea ferrous export prices have already waned as a result of Turkey’s relative absence from the US market, casting doubt on the trajectory of domestic prices in March’s trade.

Participants who were initially bullish are now more cautious, with mills expected to find it easier to cover their requirements with lesser competition from Turkish buyers, with some now touting a strong sideways for prices over the period.

Nonetheless, US shredders raised feedstock prices in the week to Monday February 13, which may be a sign that shredded scrap prices may still increase, according to sources.

Shredded scrap, a notoriously tight grade in the current climate, is ordinarily exported in abundance to Turkey for rebar production, but supply in the US may be tight enough to offer support for domestic sellers in March.

Prices for shredded scrap rose by $20-30 per gross ton in many US markets in February while those of heavy melting scrap and plate and structural material — another major rebar component — were broadly up to the same extent.

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