WEEKLY SCRAP WRAP: Fall in Turkish market pushes down Taiwan, India prices

Turkish, Indian and Taiwanese scrap import prices continued to soften this week as Turkey booked Canada-origin cargoes at sharply lower prices, while demand in China for long steel and billet was also weakening.

Turkey imports
Turkish scrap import prices went down by $35-38 per tonne over the past week as a Canadian supplier agreed to sell two cargoes at lower prices.

A steel producer in the Iskenderun region booked a Canadian cargo, comprising 15,000 tonnes of HMS 1 and 15,000 tonnes of P&S at an average price of $275 per tonne cfr, on Thursday March 23.

A second steel mill the same region booked another Canadian cargo, comprising 25,000 tonnes of HMS 1&2 (90:10) and 25,000 tonnes of shredded, at an average price of $281 per tonne cfr, on March 20.

Market participants believed that the main reason for the fall in prices was weak demand for finished steel.

“I think we are at a slow period and this may last until the Irepas conference,” another Turkish source said.

The 76th International Rebar Producers & Exporters Assn (Irepas) conference for the long steel sector will take place in Budapest, Hungary, from March 26 until March 28.

“In the past two years, it has become more and more difficult to read and predict these markets. Frankly, for a long time now, I have felt that the Turkish steel mills are the victims of their own crazy buying patterns,” a European source said.

“Staying out of the market for four to six weeks at a time will, of course, drop prices like crazy. But the minute that they are back in the market, sellers move prices up, and even hold back from selling – so [that] prices move up again, a lot and very quickly. All this game-playing serves no purpose,” he added.

Taiwan imports
Import prices for containerised HMS-grade ferrous scrap in Taiwan have fallen for a second week as buyers on the island became cautious because of market weakness in both Turkey and China.

Most Taiwanese electric arc furnace (EAF) mills were heard to be either out of the import market for scrap or buying limited volumes of high-grade material at competitive prices.

Bookings for such higher-grade scrap cargoes were confirmed at prices equivalent to around $270-275 per tonne cfr for HMS 1&2 (80:20).

Offer prices of HMS 1&2 (80:20) cargoes from the USA were heard falling from as much as $278-280 per tonne cfr early in the week to as low as $270 per tonne cfr by Friday.

There was news of bids or buying interest expressed by one or more buyers at prices around $265 per tonne cfr, but US suppliers were showing resistance to such prices.

Cargoes from Central America were heard in the market at prices as low as $260-265 per tonne cfr.

The Asian market for scrap was also affected by news about one bulk cargo from the USA being sold at the end of the week at only $280 per tonne cfr to South Korea.

Sources noted that, historically, there has been a difference of $20-30 per tonne between prices for bulk and containerised scrap, which meant that prices for containerised HMS 1&2 (80:20) from the USA could go as low as $250 per tonne cfr over the next few weeks.

India imports
Although business for shredded scrap arriving in India took place at the start of the week, the dramatic Turkish price fall reported on Monday led to buyers staying away from the market as the week progressed.

UK-origin material was sold at $313-315 per tonne cfr Nhava Sheva at the beginning of the week, while bids and offers at the end of the week were heard at $290-295 per tonne cfr.

“Nobody is interested in buying anything and the markets will go further down. [It will not be] a big [drop] but by $10-15 [per tonne],” one trader said.

“There’s panic in the market; Turkey has fallen; [we] won’t buy anything,” one seller reported being told by a customer this week.

Market activity was also suppressed by the problems sellers are facing on container freight rates and space. Shipping companies have slashed the number of vessels on the water and in April they intend raise freight costs from Northern Europe to India by around $300 per tonne per 20ft container.

“The cost of freight means that vessel [operators] have an advantage. If Turkey drops prices, they will still get the material as there is no movement in [containers],” a UK-based seller said.

These issues, added to the volatile price environment, have caused a deadlock.

“Suppliers are waiting and looking at freight [costs], and buyers are waiting and looking at the market,” another seller said.

CIS exports
Prices in the Turkish A3-grade scrap short-sea import market have declined by $30-35 per tonne over the past week, following a drop in prices in the deep-sea market.

Market participants have also complained about a lack of vessels to ship scrap from Russia across the Black Sea, due to the higher volumes of grain shipments being sent to Turkey along the same route.

“We have seen a lot of short-sea contracts cancelled due to the absence of vessels and no willingness among mills to give suppliers any extensions,” a trader said.

“Russian grain traders tried to ship to Turkey before as they thought an import tax was to be imposed, so there were basically no vessels for scrap [shipping],” a trader said. “Meanwhile, the market started to weaken. Customers do not keep the contract alive when the shipment is even one hour late [and] this has created many problems.”

The price estimated by short-sea traders for A3 scrap from Russia was heard at $270 per tonne cfr Turkey this week.

“We’d need a sales price of at least $270 [per tonne] cfr Turkey to break even, based on the collection price in Russia and the exchange rate,” a trader said.

Romania-origin A3 scrap was heard on offer at $265 per tonne cfr Turkey.

But Turkish buyers want to see a maximum price of $250 per tonne cfr.

Turkey domestic
Turkish domestic scrap prices started to weaken at the beginning of the week, in response to falling imported scrap values and high scrap stocks.

Juan Weik in Singapore, Lee Allen in London, Nadia Popova in Moscow and Mei Ling Toh in New York contributed to this report.