Turkish scrap prices jump on supply constraints again

Posted on 08 March 2019

Source: Kallanish

Turkish scrap import prices have registered a clear increase this week as mills continued purchases. Turkish rebar demand, which remains sluggish, was not the driver, however, although one mill was heard concluding a large billet export deal.

Following a Baltic-origin deal reported at the end of last week at $310.5/tonne for HMS 1&2 80:20, four further deals have occurred this week. Two were from the Benelux. One, from the Baltic, was for HMS 80:20 at $319/t cfr Turkey, shredded at $324/t and bonus at $329/t. The latest deal, from the US, was for 32,000 tonnes of HMS 80:20 at $322/t, 5,000t shredded at $327/t and 3,000t bonus at $332/t for March shipment.

Scrap merchants say a shortfall in supply is behind the price hike, as it was during the last uptick in January. “Demand in the EU and US markets makes it difficult to get a hold of scrap for the export market,” a Baltic-based supplier tells Kallanish. He adds he is “… not so worried” about continued weak demand for Turkish long products as there are other factors driving scrap prices.

A second Baltic merchant admits: “Turkish rebar prices do not justify the price increase.” He adds, however, that scrap could rise to anywhere between $330-340/t. Offers from the US and Baltic are now minimum $325/t cfr Turkey, with some merchants already quoting $330/t.

A third, European scrap merchant says sentiment in Turkey’s local rebar market has turned more bullish after Turkish mills succeeded raising their price to $490-495/t ex-works in recent days. “US exporters are waiting for 80:20 to reach $325/t before sales happen,” he observes. With rebar sales occurring at $495/t, Turkish mills could afford to pay $335/t for scrap, he adds when asked about price upside potential.

One Turkish steel trader, however, says the domestic rebar price increase is just the result of mills talking up the market.

Turkish mills’ rebar export offers are at $480-500/t fob Turkey, depending on the mill. However, sales remain a struggle. 

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