WEEKLY SCRAP WRAP: Turkish import prices rise on added bookings; other markets stable
Turkish mills resumed their deep-sea purchases with slightly higher prices during the working week from Monday May 22 to Friday May 26, while other markets were comparatively stable, Metal Bulletin has learnt.
Turkish steel producers booked around 240,000 tonnes of scrap late in the week with support from domestic finished steel demand.
Turkish steel producers went quiet at the end of last week but decided to resume their deep-sea purchases as demand in the local rebar market was strong, with increasing construction activity and tight supply.
The producers came back to the market and booked seven deep-sea cargoes on Wednesday-Thursday May 24-25. The deals totalled more than 200,000 tonnes.
A steel producer in the Iskenderun region booked a European cargo, comprising 20,000 tonnes of HMS 1&2 (75:25), 7,000 tonnes of HMS 1 and 5,000 tonnes of bonus, at an average price of $270 per tonne cfr.
Another steel mill in Northern Turkey booked a European cargo, comprising 22,500 tonnes of HMS 1&2 (75:25), 4,500 tonnes of a mixture of P&S and HMS 1, 4,500 tonnes of new cuttings and 3,500 tonnes of shredded, at an average price of $270 per tonne cfr.
A steel producer in the Marmara region booked a European cargo, comprising 23,000 tonnes of HMS 1&2 (75:25), 6,000 tonnes of a mixture of P&S and HMS 1 and 6,000 tonnes of new cuttings, at an average price of $270 per tonne cfr.
The same mill booked a second European cargo, comprising 23,500 tonnes of HMS 1&2 (75:25), 10,000 tonnes of shredded and 6,500 tonnes of bonus, at an average price of $270 per tonne cfr.
A steel mill in the Izmir region booked a Baltic Sea cargo, comprising 26,000 tonnes of HMS 1&2 (80:20) at $272 per tonne, 5,500 tonnes of bonus at $282 per tonne and 1,500 tonnes of shredded at $277 per tonne cfr.
Another steel mill in the Iskenderun region booked a Baltic Sea cargo, comprising HMS 1&2 (80:20) at $272 per tonne, shredded at $277 per tonne and bonus at $282 per tonne cfr. The volumes involved were uncertain.
A steel producer in the Marmara region booked a European cargo, comprising 24,000 tonnes of HMS 1&2 (75:25), 6,000 tonnes of busheling, 8,000 tonnes of a mixture of P&S and HMS 1, and 2,000 tonnes of rails, at an average price of $273 per tonne cfr.
Market participants generally expected Turkish mills to continue their deep-sea scrap purchases, Metal Bulletin was told.
“I do not think this is the last Baltic Sea cargo available, as some cargoes are still waiting for customers. It seems like we are going to have a busy Ramadan,” a trading source said.
“I believe the mills will continue their scrap purchases as long as the demand for domestic finished steel remains strong,” a Turkish source said.
“I think [Turkish steel producers] will continue to buy scrap,” a CIS source said. “Otherwise, they may face higher prices later.”
Turkish steel mills’ absence from the US market left the deep-sea ferrous scrap market quiet and US scrap export prices static.
Only a few Turkish mills were in the market for scrap right now, sources said, while others were keeping watch on finished steel demand before they moved to procure more raw materials.
“Ramadan is starting this week, so it is not a surprise that the market is quiet. It happens every year, and there’s no reason for it to be different this year,” a trader source said.
Even though Turkey’s rebar sales in the export sector are discouraging, Turkish steelmakers are having better luck at home.
Import prices for USA-origin containerised HMS-grade ferrous scrap in Taiwan have been unchanged for the third consecutive week, even though upward pressure has been mounting.
Unlike last week, however, there were no deals heard at prices below $235 per tonne cfr, as US scrap suppliers continue to raise their offer prices, traders and buyer sources said.
Most offers from the USA have been above $240 per tonne cfr, even though no transactions were heard beyond that threshold.
“I thinks most traders are actually holding off their cargoes this week, because Japanese scrap is more expensive,” one Taiwanese trader said.
Several Japanese H2-grade bulk cargoes have been sold in Taiwan in recent weeks, at prices around $240 per tonne cfr, but no activity was reported this week as indicative offers moved up above $250 per tonne cfr, sources said.
One buyer source said that volumes being offered from suppliers on the West Coast of the USA were “very limited”, and that traders could be adopting a wait-and-see attitude in expectation of higher prices next week.
Prices for imported containerised scrap in India were largely steady this week on a lack of buying activity, sources told Metal Bulletin on Friday May 26.
Large gaps have opened up between the valuations from buyers and sellers, according to market participants, which is preventing business from being concluded.
“Customers are not willing to pay what the yards are asking,” one seller said.
“Buyers have to come forward now,” an Indian trader added.
One reason for the lack of activity was low demand for finished steel bleeding through into the import scrap markets. Low steel prices mean that some local mills are running at losses of $20 per tonne of steel, according to one seller, which is pushing consumers out of the market for imported scrap.
Another factor causing the lull in buying activity was the appreciation of the euro against the US dollar, which has forced up prices for scrap shipments from European sellers. The euro was trading at €1 to $1.22 on Friday, compared with €1 to $1.09 two weeks ago, according to Oanda.com.
“Nobody is getting material out at the moment [due to] the exchange rate,” a trader said.
Metal Bulletin’s index for containerised shredded scrap imports in India closed at $295.89 per tonne cfr on May 26, up by $0.77 per tonne compared with $295.12 per tonne cfr Nhava Sheva seven days ago.
The Indian import market for shredded scrap was a perfect illustration of the problems being caused by the strong euro this week, with offers from European sellers comfortably exceeding the Indian market’s bid level.
Offers for EU-origin shredded material were heard at $305-310 per tonne cfr Nhava Sheva, while buyers were heard to be interested only at $280-290 per tonne cfr.
Turkish domestic auto bundle scrap prices inched up at the beginning of the week as demand for material was still firm, while ship scrap prices remained comparatively stable.
Juan Weik in Singapore, Lee Allen in London and Mei Ling Toh in New York contributed to this report.