WEEKLY SCRAP WRAP: Turkish prices set to bounce back after hitting bottom

Turkish import scrap prices are expected to rebound after reaching rock bottom in the working week from Monday October 2 to Friday October 6, sources have told Metal Bulletin.

Scrap suppliers to Turkey were heard to be staying out of the market on Friday because they were expecting higher prices next week, Metal Bulletin heard.

Despite the expectation that prices will bounce back soon, prices in several major global scrap markets – including those in Turkey – continued to drop this week.

Import scrap prices in India and Turkey inched downward, while US export prices and Turkish domestic scrap prices fell more sharply.

Turkey imports
Turkish mills spent the early part of the week attempting to push down scrap prices before booking three deep-sea cargoes totalling around 96,000 tonnes of material on October 4.

A steel producer in the Izmir region booked a Baltic Sea cargo, comprising 10,000 tonnes of HMS 1&2 (80:20) at $297 per tonne and 20,000 tonnes of shredded at $302 per tonne cfr.

The same mill booked a second Baltic Sea cargo, comprising a minimum of 4,000 tonnes of bonus at $305 per tonne, a minimum of 1,500 tonnes of rail at $310 per tonne, and a maximum of 3,000 tonnes of shredded at $300 per tonne, with HMS 1&2 (80:20) at $295 per tonne cfr accounting for the rest of the 29,000-tonne cargo.

A steel mill in the Iskenderun region booked a European cargo, comprising 27,000 tonnes of HMS 1&2 (80:20), 5,000 tonnes of shredded and 5,000 tonnes of a mixture of P&S and HMS 1 scrap at an average price of $294 per tonne cfr.

Market participants did not expect any further price decreases after the cargoes were booked.

“Scrap suppliers managed to resist lower prices and Turkish mills returned to the market. I do not expect the market to go down from this point,” one Turkish source said on Thursday.

“Almost all of the suppliers vanished today and the mills have been asking for scrap since this morning,” a Turkish trader said on Friday.

And another seller thought that prices would recover once Turkish steelmakers do business with US scrap suppliers.

“Mills will have to go to the US [sellers] sooner rather than later,” he said, predicting that USA-origin HMS 1&2 (80:20) will be sold for $305 per tonne cfr next week.

USA exports
US ferrous scrap export prices fell again after the sale of two bargain-priced cargoes from the country to Turkey late last week, but global exporters in the USA have been fighting Turkish mills’ push for further discounts.

As a result of the sales last week, Metal Bulletin sister title AMM’s weekly US East Coast ferrous scrap export index for HMS 1&2 (80:20) fell to $283 per tonne fob New York, compared with $312 per tonne a week earlier.

Trading ground to a halt earlier this week as Turkish mills sought to reduce prices to $290 per tonne cfr, while US exporters were reluctant to accept prices below the threshold of $300 per tonne.

Market participants were split on their immediate outlook for export pricing, with some believing that the market is in for more downward correction, while others think that prices have already bounced off the floor.

“There is a thought that [the] export [price] has bottomed out and prices might come back. There were some panic sales done last week at less than $300 per tonne, but I think we will get back to $300 [per tonne] again pretty quickly,” an export source said.

“I think the market is very unsure what is going to happen next. Bulk sellers are not desperately offering cargoes at the moment, but the momentum is in the hands of the Turks right now,” a trading source said.

India imports
Prices for shredded scrap imported into India in containers fell for the second week in succession as buyers deserted the market with the beginning of the country’s religious holiday season.

“All of the buyers are away from the market because it is the festive season, which is more or less a holiday,” one seller said. “Maybe they will come back in two weeks’ time.”

The Hindu religious festival of Sharad Purnima took place on October 5, while the Diwali festival of light will be celebrated on October 18.

Low demand in the market meant that Metal Bulletin’s index for containerised shredded scrap imports into India fell to $311.90 per tonne cfr Nhava Sheva on Friday, down by $5.29 per tonne week-on-week.

Despite the weak market, certain sources were confident that prices for imported shredded scrap would rise again soon.

“It feels like the market has bottomed out. There is lots of resistance from suppliers about accepting any lower price bids,” another trader said.

Unlike the Indian and Turkish markets, Pakistan’s import scrap market bucked the trend and has moved upward over the past seven days.

Offers for containers of shredded scrap started the week at $312 per tonne cfr Port Qasim, before deals closed at that price and then moved up to more than $320 per tonne cfr, Metal Bulletin heard.

Taiwan imports
Taiwan’s import prices for containerised HMS-grade ferrous scrap were unchanged over the past week with trading activity being limited by significant holidays in the country.

Metal Bulletin’s assessment of import prices for USA-origin HMS 1&2 (80:20) into Taiwan was $280-285 per tonne cfr Taiwan for the week ended October 6, unchanged from last week.

“Due to the two major holidays, many market participants were only working a limited number of days, so there weren’t many offers from key traders. Furthermore, there’s the major National Day holiday next week,” a trader source based in Taiwan said.

Buyers have also been reluctant, not submitting firm bids for imported materials.

“There is not much interest from buyers this week as they are still waiting for the Golden Week holiday in China to end. Buying sentiment will likely improve from next Wednesday,” a second trader in Taiwan said.

Market sources said there was still no clear indication of how prices would move after the holidays, and this had damped buying interest.

“The lower import prices into Turkey have depressed sentiment further. Chances are that the previous buying out of Turkey has subsided after buyers’ positions were covered, leading to the price dip,” a buyer said.

Turkey domestic
Turkish domestic auto bundle scrap prices continued to soften over the past week, in line with falling imported scrap values, according to market sources.

Metal Bulletin’s weekly price assessment for domestic auto bundle (DKP grade) scrap in Turkey on Monday was TRY980-1,140 ($274-319) per tonne delivered, down from TRY1,040-1,180 per tonne last week.

The downward movement in the weekly assessment came after steel producers reduced their buy prices for auto bundle scrap by TRY20-90 per tonne over the previous seven days.

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