Turkey ferrous: Price flat as demand increases

Market: Metals
05/07/21

The Turkish scrap import price was flat on Monday as local rebar and billet demand continued to rise, bringing many mills to the scrap market to buy.

The Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment was flat at $497.80/t cfr.

Four Iskenderun mills were looking to buy deep-sea scrap for August shipment with three of them selling billet to domestic buyers today at attractive prices. One mill sold billet at $686/t ex-works and the other two sold at $688/t ex-works. Several of the Iskenderun mills tend to pursue back-to-back scrap business when selling billet, so deep-sea scrap cargoes are expected to trade imminently with that region.

All four mills were heard to be seeking shred, for which availability was thin today as US exporters were out of the market for a national holiday.

Turkish domestic rebar demand continued to steadily increase and an Izmir mill sold 10,000t at $705/t ex-works today, $5/t higher than it did for the 55,000t it was heard to sell from 30 June-2 July. All mills increased their domestic rebar offers this morning by the equivalent of $5/t or $10/t.

Mills claimed they could not sell close to their higher offer levels of $730/t ex-works because of the Izmir mill's sale at $705/t ex-works but they do not need to sell at the higher price in order to buy scrap at or just above current prices. The widest sustained scrap-domestic rebar margins this year have hit around $220/t.

Mills continued to face strong resistance from deep-sea scrap suppliers to offer cargoes, and they are behind on their August shipment purchasing from a time perspective and relative to the availability of scrap in the market. At least 10 deep-sea cargoes are expected to trade this week for August shipment. No deep-sea scrap supplier was heard to be aggressively looking for a sale today.

Mills likely only have a few more days left to see if they can try to find a supplier willing to sell in the low $490s/t cfr for HMS 1/2 80:20 but the consensus is that mills would have already attracted lower prices during this three week period of largely being absent from deep-sea negotiations if they were able to.

At the same time however, the period in which mills have largely not bought much material could allow them to buy a very large quantity of August shipment material in a narrow price range within a very short period of time in the first half of July – a price level that would still likely be very healthy versus their steel sales.

In the short-sea Turkish imported scrap market, no mill has yet paid $455/t cif Marmara for HMS 1/2 80:20 yet but Romanian and Bulgarian suppliers expect demand to increase for short-sea material later this week.

The Argus daily A3 cif Marmara steel scrap assessment was flat at $455/t.

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