Posted on 28 Jul 2021
Turkish steel producers’ demand for scrap is yet to recover following their return from a one-week holiday.
Although their requirement for August-shipment scrap purchases is yet to be fully satisfied, they are not rushing to conclude new bookings. This is because they initially want to have a clear picture of rebar demand and they are not worried about scrap supply as there are sufficient scrap cargoes in the market.
On Tuesday, there was a rumour of a Baltic-origin HMS 1&2 80:20 sale at $475/tonne cfr Turkey, though this was not confirmed by deadline.
Most premium HMS 1&2 80:20 suppliers find $475-480/t cfr workable, although Turkish mills are seen targeting lower prices. For EU-origin HMS 1&2 80:20, Turkish mills’ price ideas are at below $470/t cfr, while offers are seen at $470-475/t cfr.
In Turkey’s absence, several cargoes were booked by Egyptian mills at prices below $470/t cfr. A supplier in the UK is heard to have sold HMS 1&2 80:20 at $462/t cfr, while an EU-origin supplier sold at average $468/t cfr.
A scrap agent tells Kallanish: “An upward trend would only be a dream. Every supplier has at least one cargo to sell. Once Turkey starts purchasing, they will compete to sell. I am not expecting a dramatic slump but a decrease is inevitable under current market conditions.”
Although offers from Russia have decreased significantly due to the higher export tax, ex-Romania cargoes are booked at $435-440/t cfr northern Turkey.
Most market participants think Turkish mills will start inquiring about scrap in the second half of the current week or next week at the latest.
Meanwhile, the supply of scrap in both the US and EU is fairly abundant, especially for HMS. Prices are expected to see a decrease, up to $20-25/gross ton in obsolete grades and a steady trend in prime grades once August trading starts in the US.
Turkish rebar mills are seen eyeing Asian demand. However, despite competitive Indian offers at $740-750/t cfr actual weight in Asia, rebar demand is yet to recover. In the domestic market, surprisingly, Turkish mills saw lively demand on the first working day after the holiday. Stockists and end-users have bought rebar from mills mostly at $710-735/t ex-works, depending on the region. On Tuesday, however, demand softened again and prices decreased to $707-718/t ex-works, VAT excluded.
Source:Kallanish
