Turkish scrap holds despite inactivity, billet trumps rebar

Posted on 12 October 2018

Source: Kallanish

Two Turkish scrap import bookings were reported on Thursday at generally stable prices following a silent week in which mills were unable to secure sough-after price reductions.

One Turkish mill booked an unspecified tonnage of HMS 1&2 80:20 at $327.5/tonne cfr Turkey from the Baltic. This compares to a Baltic-origin cargo booked last at $328/t following a US-origin deal concluded at $327/t. The second cargo this week was Benelux-origin for 20,000 tonnes of HMS 75:25, 5,000t shredded, 7,000t HMS1, 2,000t busheling and 6,000t cut rebar at an average of $325/t.

Following last week’s 40,000t rebar cargo sale to Singapore at a reported $490-495/t fob Turkey, a second Turkish mill was heard this week to have sold rebar to Latin America at around $500/t fob. However, rebar sales activity otherwise remained quiet, with sources pointing out that billet is a better market for Turkish mills than rebar at present.

Turkish mills are officially quoting rebar at $500-510/t fob, depending on the producer, but $495/t fob is achievable for larger-tonnage sales. Moreover, one mill was heard recently selling to Israel at a price that nets back to $490/t fob. “These guys are liars,” one Turkish trader says of mills’ official quotes.

The International Rebar Exporters and Producers Association (Irepas) said earlier this week that the scrap-rebar spread has dropped to $170/t, its lowest figure since summer 2017 (see Kallanish passim). Billet is therefore a more attractive proposition. One Turkish mill was heard selling billet to Libya at $477-480/t fob Turkey.

Demand in Turkey’s local rebar market, meanwhile, remains dead owing partly to problems obtaining project financing due to high interest rates. “The local market is dead – there’s no money, no interest,” laments a local trader. Prices are down to $505-510/t ex-works.

“If scrap prices don’t go down, mills will have to stop production,” a Turkish trader observes. “This will reduce buying and then scrap will have to come down, I’m sure of it.” 

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