Posted on 01 Dec 2022
All Turkish mills have increased their domestic scrap buying prices since last week amid sharp import price hikes, Kallanish notes.
Mills are trying to get the most out of domestic scrap supply, with imported suppliers targeting even higher prices now.
Following the latest Baltic-origin scrap deal at $366/tonne cfr Turkey for HMS 1&2 80:20 and $386/t cfr for bonus grade, a Benelux exporter is heard to have sold HMS 1&2 80:20 at $360/t cfr. A Marmara mill is heard to have bought Baltic-origin HMS 1&2 80:20 at $373/t and P&S at $400/t cfr. Late on Wednesday, a US-origin supplier is confirmed to have sold HMS 1&2 85:15 at $378/t cfr. A Baltic supplier was still negotiating with a mill and expected to sell HMS 1&2 80:20 at $373-375/t cfr.
Some suppliers of premium HMS 1&2 80:20 are now heard targeting to sell at above $390/t cfr.
"The market has gone crazy with ballooning prices. I hope this situation does not end in a disaster. We will most likely see further production cuts amid current production costs," one mill source observes.
Another mill source agrees, adding: “This situation will harm many producers unless domestic demand strengthens. The situation in export markets is not favourable anyway.”
Suppliers, pointing to tight supply and approaching holidays, however, do not find lower prices likely in the near term.
A Baltic-origin supplier says: “There are 17 public holidays in the next 45 days in the Baltic region. Turkey has to complete December and January requirements now or will have to wait until the second half of January.”
Almost all Benelux exporters have increased dock prices above €300/t delivered since Tuesday as sourcing material has become impossible at lower values. European suppliers have hiked price targets above $365/t cfr for HMS 1&2 80:20.
Turkish mills are seen inquiring about short-sea and domestic scrap as they do not find current steel sales prices and volumes sufficient to afford deep-sea scrap.
"End-user demand is yet to recover in the domestic market. How long can stockists' demand continue under current conditions? Exports are becoming even harder as we have totally lost our competitiveness. The future has become even darker now following these sharp price rises," says another mill.
However, some market participants are expecting domestic end-user demand to recover in the new year as they think end users will gain governmental support as an upcoming election pledge.
Turkish mills further increased domestic rebar quotes on Wednesday. Mills' prices stood mostly at $655-670/t ex-works. However, $650/t was also available from one western mill while $680/t was quoted by a few mills. The latest export sale was confirmed at $660/t fob actual weight, though export sales volumes continue to remain low.
Turkish shipbreaking scrap prices saw multiple corrections on Wednesday and reached $370/t delivered, up from $335-338/t last week. The lira remained almost unchanged from last week at 18.62/$1 at business close on Wednesday.
Source:Kallanish
