Posted on 28 Oct 2020
Turkish mills have purchased further scrap cargoes this week, following numerous deals last week, despite political and economic uncertainty.
The fast-spreading coronavirus, political tensions and rapid depreciation of the lira are preventing Turkish mills from having a clear picture of the market. As a result, Turkish mills continue inquiring about scrap and concluding purchases but want to avoid any further price increases.
Turkish mills have now completed November-shipment scrap purchases. While some market participants think mills will take a break before starting to buy December-shipment cargoes, as stocks are sufficient and uncertainty prevails, others believe they will continue their purchases.
HMS 1&2 80:20 scrap prices have further increased to $292/tonne cfr and $293.5/t cfr Turkey from the US and Baltic respectively in the latest bookings. The latest EU-origin scrap booking, meanwhile, stands at average $295/t cfr. New HMS 80:20 offers from the Baltic and US are at $295-297/t cfr. European offers for the same grade exceed $290/t cfr.
Short-sea offers from Romania, Bulgaria and the Adriatic appear at above $280/t cfr, while the Russians are offering HMS 80:20 at above $290/t cfr.
A Baltic-origin scrap supplier, who expects to see stronger scrap demand this week, tells Kallanish: “This week’s workable price is $293-297/t cfr for HMS 80:20 for me. But, as of next week, we may see prices at above $300/t cfr.”
Another supplier says: “Turkish mills will not halt December-shipment purchases because they have all completed finished steel sales this year. Even for January, they are offering material for second-half only. I think their sales are not as bad as they bemoan.”
A US supplier adds: “December is a critical month, holiday season. They cannot leave December-shipment cargoes to the last minute as they did in October. And I think mills know that if they stop now, they will face even higher prices on their return. I think we will hear more bookings this week.”
A European scrap agent, however, says: “Under usual conditions they should not take a break, but we are going through very unusual days. Every day we wake up to a new disaster. It is impossible to predict what tomorrow will bring in terms of virus, politics and economics.”
Despite stagnant domestic demand, Turkish domestic rebar prices have reached record-high levels on a lira basis, due to the very fast depreciation of the domestic currency this week. Demand has also had a slow start to the week in global markets. Turkish mills are not expecting much from this week in terms of finished steel sales due to 1.5-day national holiday starting on Wednesday. However, they are expecting scrap prices to remain firm for some time.
Source:Kallanish
