Posted on 20 Apr 2021
Following the decreases recorded in obsolete scrap prices during April trading in the US, most market participants are no longer expecting a downward trend in May trading. A few suppliers, however, considering Turkey is the largest export destination, voiced their concerns regarding the reflection of current price decreases in Turkey in US obsolete scrap pricing.
A US supplier tells Kallanish:” Scrap prices are falling in Turkey. Although domestic and West Coast demand are strong, we cannot ignore the situation in Turkey. I think we may see lower prices in obsolete grades unless prices recover in Turkey. Prime scrap prices will most probably improve,”
Most market participants, however, are seen to be more bullish for May trading, even for obsolete grades. While market participants agree on higher prime grade prices, expectations are observed varying for obsolete grades.
On the West Coast, containerised HMS 1&2 80:20 prices have further increased in Taiwan last week amid strong demand as Japanese scrap remained uncompetitive. US-origin offers, which stood at $420-425/t cfr a week ago, have increased at above $435/t cfr on Monday following the bookings at $428-430/t cfr last week.
On the East Coast, Turkey’s demand for imported scrap remained low last week. With the availability of large number of offers in the market, Turkish mills have lowered their price expectations.
Two Venezuela-origin cargoes were booked at $415.5 and $416.5/t cfr. A flat steel mill in southern Turkey has booked a Denmark-origin cargo at average $430/t cfr while a Baltic-origin cargo was bought by another flat steel mill at $425/t cfr, both at the beginning of last week.
Although Turkish mills have given bids at $410-415/t cfr for EU-origin HMS 1&2 80:20, those prices were refused by European suppliers amid stronger euro and high freight. An EU-supplier who offered at $427/t cfr accepted to sell at $417/t cfr on Friday. Another EU-origin booking was concluded at $416/t cfr.
Although US suppliers had room to decrease their prices due to the sharp fall in freight rates, no US-origin scrap booking was heard in Turkey. A supplier has directed its cargo to Egypt, where demand was stronger, and sold at $436/t cfr.
Considering the ongoing imbalance in scrap supply and demand and insufficient domestic rebar demand in Turkey, Turkish mills are not expected to bid US-origin HMS 1&2 80:20 at above $425/t cfr.
Source:Kallanish
