Posted on 25 May 2022
The long-lasting downtrend in Turkish scrap prices is seen to have ended and sentiment has improved following India’s export duty imposition. Suppliers are seen strongly resisting lower Turkish bids.
Although Turkish mills had been targeting to buy premium HMS 1&2 80:20 at below $450/tonne cfr Turkey, this level now seems unworkable after sentiment became more bullish.
Effective 22 May, India hiked export duties on iron ore and some steel products. Turkish mills are expected to benefit, as Indian steel prices in the global market are likely to become less competitive. While this is expected to decrease Turkey’s steel imports from India, exports are likely to improve. Inquiries for Turkish steel in export markets have improved but there is yet to be a big impact. Scrap suppliers are nevertheless strongly resisting lower prices.
Turkish rebar export offers were meanwhile at $760-770/t fob Turkey actual weight on Tuesday.
Although some mills are making phone calls to understand the position of scrap suppliers, Turkish mills’ demand for scrap was generally subdued on Tuesday as they initially want to gauge the situation in steel sales.
One Turkish mill tells Kallanish: “There are rumours of large-volume steel sales in the market but they are not true. Yes, Yemen started to buy but the volume of sales is not that big. Israel is still away. We expect to see an improvement in sales but not a sharp rise. We need to see the impact [of market developments] first.”
Another mill agrees and adds: “Those who are trying to manipulate the market are saying ‘large-volume steel sales’, but this is not true. Some scrap suppliers, believing in these rumours, may be targeting higher prices now but I can still buy premium HMS 1&2 80:20 at $460-465/t cfr.”
A trader says: “A slight improvement in steel sales is expected but a remarkable recovery is questionable. Some even doubt that demand will be sufficient. I think both scrap suppliers and Turkish mills are trying to gauge buyer reactions to higher prices. But the market is stable to me.”
While all market participants agree the downtrend is over, the debate focuses mostly on the extent of the recovery. No one foresees a sharp recovery under current market conditions.
Although no fresh deal was heard on Tuesday, market participants find prices workable of US, Baltic and EU scrap at $465-470/t, $460-465/t and $450-460/t cfr respectively.
Short-sea prices, which had fallen to $385-390/t cfr, rebounded to above $420/t cfr Turkey on Tuesday.
Turkish mills increased both domestic and shipbreaking scrap prices on Tuesday, meanwhile.
Source:Kallanish
