WEEKLY SCRAP WRAP: Price volatility continues as Turkey softens, India improves
Global ferrous scrap prices continued their year of volatility in the week from Monday November 6 to Friday November 10, with a softening in Turkish import scrap prices contrasting with the better market environment seen in India.
Stocks of ferrous scrap at some yards in Europe, the United Kingdom and the United States have become tighter, leading to a moderate rise in Turkish import scrap prices last week. This made some market participants expect higher prices in the coming weeks.
But a weakening of the Turkish lira and low demand for finished products in the country pushed down the indices for Turkish imported scrap on Thursday.
After a quiet beginning to the week, Turkish mills leapt into action on Thursday, and booked three cargoes at lower prices than those agreed last week.
A steel mill in the Marmara region booked a European cargo on Thursday, comprising 10,000 tonnes of HMS 1&2 (80:20) at $296 per tonne, 10,000 tonnes of shredded at $302 per tonne and 10,000 tonnes of bonus at $307 per tonne cfr.
Another steel mill in the Iskenderun region booked a UK cargo, comprising 25,000 tonnes of HMS 1&2 (80:20) at $300 per tonne cfr.
A final mill in the Izmir region booked a US cargo, comprising HMS 1&2 (80:20) at $303 per tonne, shredded at $308 per tonne and bonus at $313 per tonne cfr. The cargo breakdown was not clear at the time of publication.
One reason given for the drop in prices was a weakening in the Turkish lira’s value. The lira was trading at TRY1 to $0.2578 on November 9, compared with $0.2624 on November 2, according to Oanda.com.
Markets went quiet again on Friday, with mills focusing on selling their finished steel, market sources said.
“The finished steel export market is slow and the mills want to see a recovery and a price level to restart scrap purchases,” a Turkish source said.
“We may see a quiet market for a week or ten days, as the mills will focus on finished steel sales for the moment,” another Turkish source said.
Prices for containerized shredded ferrous scrap imported into India rose this week amid expectations of more buying before the end of the year, sources told Metal Bulletin.
Inventories at Indian steel mills are running low after several months of buying small volumes of imported scrap. Steel producers are expected to dip into the market to replenish their stocks before the Christmas holidays, according to market participants.
Metal Bulletin’s index price for imported shredded scrap in India on Friday rose to $329.07 per tonne cfr Nhava Sheva, up by $5.01 per tonne week-on-week.
“The Indian markets are going to rise in a few weeks but, for shredded, I don’t think many Indian buyers have a chance [to buy] at the current prices,” one trader said.
“Who will bite first? If consumers or mills do, then there could be a bounce-back in prices,” one seller said. “But if yards react with discounts, there could be a softening [in prices].”
Offers for shredded material from the UK and Europe were heard at $330-335 per tonne cfr Nhava Sheva, and one deal for such material was heard in the same price range.
A US exporter failed to negotiate better pricing on the latest bulk sale to Turkey, resulting in a $7 per tonne fall in ferrous scrap export prices on November 9.
Meanwhile, the most recent bulk sale from Canada to Turkey was at an average price of $315 per tonne cfr for a mixed cargo containing HMS 1&2 (90:10), shredded, and plate and structural scrap (P&S).
“Turkey is hungry and they are looking for material. But I don’t think the $320 per tonne price will be back any time soon. European and Baltic Sea suppliers seem to be happy with the current prices,” an export source said.
The limited number of deep-sea cargoes available in the market is putting a damper on Turkish scrap trades, despite healthy demand, according to sources. It is unclear when Turkish mills will resume their cargo bookings.
“The bulk exporters are filling very good orders right now. They are finishing their $350-355 per tonne business and they are working about $100 per tonne on their [buy and sell] spread,” a US East Coast processor source said.
Turkey domestic scrap
The price of Turkish domestic auto bundle scrap rose at the start of the week because of the weak lira, while ship scrap prices have remained comparatively stable, sources said on November 6.
Metal Bulletin’s weekly price assessment for domestic auto bundle scrap in Turkey was TRY1,105-1,220 ($286-315) per tonne delivered on Monday, up from the TRY1,035-1,170 per tonne of last week.
The rise in the assessment came after steel producers raised their buy prices for the material by TRY40-85 per tonne over the previous seven days.
“The weak lira keeps pushing domestic scrap prices upward,” a Turkish mill source said. “The increase in the import prices [last week] is also supporting higher prices.”
Cem Turken in Mugla and Mei Ling Toh in New York contributed to this report.