WEEKLY SCRAP WRAP: Turkish prices rebound, buying resumes after short break
Turkish import scrap prices regained some of their losses early in the week that began on October 9, while trading – which came to a pause mid-week due to rising political tensions between the USA and Turkey – resumed on Friday October 13.
Scrap trading prices to Turkey rose significantly from lows between $290 and $300 per tonne to trade at $300-315 per tonne cfr this week.
The arrest of a Turkish citizen who worked at the US consulate in Istanbul sparked a diplomatic crisis during which both Turkey and the USA suspended visa activities. The consequent fall in the lira’s value sent Turkish mills temporarily to the market sidelines.
Indian scrap imports mirrored Turkey’s upward price trend but Taiwanese import prices were negatively affected by volatility in the Chinese market, resulting in limited trading after buyers returned from a week-long holiday.
Turkish mills finally accepted higher prices from international scrap suppliers, booking seven deep-sea cargoes on October 9 and 10, but news of the rising political tensions and the declining exchange rate brought buying to a two-day halt.
The market silence was broken with the purchase of a Baltic Sea cargo on the final day of the working week.
A steel producer in the Marmara region booked a European cargo, comprising 15,000 tonnes of shredded, 4,000 tonnes of a mixture of busheling and new cuttings, 10,000 tonnes of a mixture of P&S scrap and HMS 1, and 10,000 tonnes of HMS 1&2 (80:20) at an average price of $309.50 per tonne.
The same mill also booked a US cargo, comprising 10,000 tonnes of HMS 1&2 (80:20) at $310 per tonne, 30,000 tonnes of shredded at $315 per tonne and 5,000 tonnes of P&S at $320 per tonne cfr.
A steel producer in Izmir region booked a European cargo, comprising 7,500 tonnes of HMS 1&2 (75:25) at $300 per tonne, and 17,500 tonnes of bonus at $314 per tonne cfr.
A steel mill in the Iskenderun region booked a US cargo, comprising 20,000 tonnes of HMS 1&2 (80:20) at $310 per tonne, 10,000 tonnes of shredded at $315 per tonne and 10,000 tonnes of bonus at $320 per tonne cfr.
Another steel mill in the Izmir region booked a US cargo, comprising 27,000 tonnes of HMS 1&2 (80:20) at $310 per tonne, 10,000 tonnes of shredded at $315 per tonne and 3,000 tonnes of bonus at $320 per tonne cfr.
And a steel mill in Northern Turkey booked a final US cargo, comprising 25,000 tonnes of HMS 1&2 (80:20) at $315 per tonne, 5,000 tonnes of shredded at $320 per tonne and 10,000 tonnes of P&S at $325 per tonne cfr.
These six cargoes were transacted on October 9.
The following day, a Turkish mill booked a European cargo, comprising 20,000 tonnes of HMS 1&2 (75:25), 2,500 tonnes of shredded, 2,500 tonnes of new cuttings and 10,000 tonnes of bonus at an average price of $310 per tonne cfr.
After a two-day break, a steel producer in the Iskenderun region booked a Baltic Sea cargo, comprising 20,000 tonnes of HMS 1&2 (80:20) at $311 per tonne, 7,000 tonnes of shredded at $316 per tonne and 3,000 tonnes of bonus at $321 per tonne cfr, on October 13.
Turkish steelmakers delivered a pleasant surprise to market participants with the purchase of four cargoes at $310-$315 per tonne on October 9, the week after US domestic scrap prices took a major downward correction for the month.
Sources expect bulk export prices to Turkey to remain below $320 per tonne, as there is likelihood of a price rise in the near term, although some Turkish mills have adjusted their rebar export prices upward.
“Electrode costs have affected Turkey, but things that occur in China tell us what they are up to in terms of billet and rebar prices. Billet prices out of China still indicate that scrap is the better option for the Turks,” a broker source said.
An export source did not expect Turkish buying from the USA to be negatively affected by the political uneasiness between the two countries in the near term. “The fact that they bought at higher prices even though the lira [has dropped in value] tells you how good their demand [for scrap] is,” he said.
Meanwhile, the containerised shredded scrap market on the US East Coast has shown the same strength seen in recent Turkish bulk sales. Market participants indicated that prices of containerised shredded scrap have risen to $290-300 per tonne fas, up from $280-290 per tonne fas a week ago.
On the US West Coast, containerised HMS 1&2 (80:20) saw little trading activity last week, as Taiwan and China were out of the market on holiday.
Limited amounts of US material were offered to Taiwanese buyers at $285-287 per tonne late last week, but deals were made at $282-283 per tonne cfr on October 9, a trading source said.
Indian shredded scrap import prices moved in tandem with the increase in Turkish trading prices as well as renewed interest from Pakistani buyers.
Metal Bulletin’s price assessment for Indian import shredded scrap was $318.40 per tonne cfr Nhava Sheva on Friday, up by $6.50 per tonne week-on-week.
A rise in export prices from UK, European and US docks has meant that traders who are trying to find a buyer in India have had to raise their target selling prices.
“The UK has come up £15-20 [$20-26 per tonne] in recent days, so I can’t sell shredded to India for less than $330-335 per tonne cfr,” one trader said.
Shredded sales to Pakistan were heard at $330-333 per tonne cfr Port Qasim this week, which has increased the upward pressure on Indian prices given that freight rates to the two countries are very similar.
Despite this upward pressure, most offer prices to India were heard at $315-320 per tonne cfr Nhava Sheva this week, with some bids from buyers around $310 per tonne cfr.
One reason why Indian prices have not been able to match those in Pakistan this week was that India is currently celebrating religious festivals – with Diwali taking place on October 19 – which has slowed buying activity, sources said.
“In the festive season, normally sales are higher because demand for steel and sentiment are better. But this time around, things are still slow and I don’t see much movement,” a trader said. “In India, most business will happen after the holiday.”
Taiwanese scrap import prices bucked the global upward trend this week as buyers remain cautious in the face of uncertain Chinese steel futures and impending production cuts.
Metal Bulletin’s price assessment for imports of USA-origin HMS 1&2 (80:20) into Taiwan was $275-285 per tonne cfr for the week ending October 13. This was down by $5 per tonne on the low end from $280-$285 per tonne in the previous week.
Negotiations for USA-origin HMS 1&2 (80:20) had widened the price to $275-285 per tonne cfr Taiwan. Offers of such material from the USA were heard at $285-290 per tonne cfr Taiwan.
A key buyer was able to secure at least 5,000 tonnes of imported scrap at lower prices last week. Market sources also reported transactions at $280-285 per tonne for a smaller-volume cargo.
Buying indications were at $270-275 per tonne cfr, although market sources said there would probably not be any sellers which would offload cargoes at those prices.
“The dips in prices should reach an end now, as Turkish prices have started to rebound,” a trader based in Taiwan said.
Buyers said that a hazy price outlook was also limiting any positive sentiment and was deterring them from submitting higher bids for imported materials.
“Market sentiments in the scrap market are still mixed because China is still not showing any firm price direction,” a source at a Taiwan steel mill said.
Turkish domestic auto bundle prices are gearing up to recover as the country’s scrap costs increase but local shipbreaking scrap prices moved in the opposite direction, finally reflecting the sharp dip seen in import prices previously.
Metal Bulletin’s weekly price assessment for melting scrap from shipbreaking in the Turkish domestic market was $295-300 per tonne delivered on October 9, down from the $325-333 per tonne of last week.
Most mills have reduced their buying prices for the material over the past week, in line with lower import values, but they are all expected to raise their prices after news of the higher scrap import values, sources said.
Metal Bulletin’s weekly price assessment for domestic auto bundle scrap in Turkey narrowed to TRY1,010-1,115 ($277-305) per tonne delivered on Monday, compared with last week’s TRY980-1,140 per tonne.
Cem Turken in Mugla, Lee Allen in London and Paul Lim in Singapore contributed to this report.