Posted on 05 Sep 2022
Turkish imported scrap prices fell sharply on a deal concluded on Wednesday from Denmark.
Although the previous deal from Sweden was concluded at $398/tonne cfr Turkey at the beginning of last week, a western Turkish mill bought Denmark-origin HMS 1&2 80:20 at $386/t cfr on Wednesday.
Some US and Baltic suppliers were still aiming to sell at above $400/t cfr on Friday. However, this price is not likely to be accepted by Turkish mills amid a significant rise in their energy costs and weak steel sales. On the other hand, one US supplier is heard offering HMS 1&2 80:20 at $390/t cfr.
Although there are some market participants who believe scrap prices will stay firm or even increase slightly, most think prices will continue to fall.
A supplier tells Kallanish: “Prices were already following a downward trend after the US sale at $402/t cfr which was followed by a Baltic sale at $398/t cfr. This trend is continuing and we are likely to see low $380/t cfr levels in the near future. There is no buying interest, especially after the energy price hikes which have increased production costs.”
Another supplier thinks the sharp rise in rebar prices will lift scrap prices.
A mill, however, says: “We have been forced to increase our rebar prices in a very weak market due to the sharp increase in our production costs. This should not mean we will pay higher for scrap.”
“It all depends on steel sales,” opines a trader. “Under current conditions, when there are almost no buyers that would accept to buy for rebar at above $660-670/t fob Turkey, how would you pay $395-400/t cfr for scrap? Under today’s conditions, I am not finding a price above $380-385/t cfr workable for scrap. Things may only change if steel sales improve at desired prices.”
Although buyers panicked from sharp price hikes accelerated their rebar purchases in the domestic and export markets on Thursday and Friday respectively, mills find sales far from sufficient. Besides, domestic demand weakened again on Friday.
On the short-sea market, the latest bookings are heard at $370-375/t cfr Turkey, depending on origin and destination. Although short-sea scrap prices are also likely to fall, the spread between them and deep-sea scrap prices may narrow as short-sea scrap is preferred by Turkish producers in challenging times.
Source:Kallanish
