Corrects number of US cargoes in third paragraph.
Turkish steel mills have substantially increased their purchases of deep-sea bulk ferrous scrap cargoes for June shipment from the previous two months, reflecting rising steel demand globally in May after the Covid-19 pandemic passed its peak in most major geographies.
Turkish mills have purchased at least 22 deep-sea cargoes for June shipment so far, with total volume estimated at 630,000t. It was recorded that 16 and 15 deep-sea cargoes were purchased for April and May shipment, with volumes estimated at 489,000t and 472,000t, respectively, under Argus data.
Continental Europe made nine of the recorded 22 June-shipment sales. The US made only four sales of that June-shipment purchase total.
One large Marmara steelmaker has purchased six deep-sea June shipment cargoes so far, up from four and five tracked for April and May shipment, respectively.
Several second-half-June shipment trades are expected to be done in the coming days. At least three large Turkish mills were looking for another deep-sea cargo this morning.
The increase in Turkish mills' scrap imports reflects higher steel demand in May and anticipation that this demand will rise into June.
In the second week of May, mills sold the largest volumes of domestic rebar of the coronavirus outbreak. One Izmir mill sold 75,000t over a period of four days. No mill was heard to have sold that volume of rebar in such a short time period in March or April. Mills have seen increased demand today and late yesterday, less than three weeks since the last domestic stockist buying cycle. The previous buying cycle was in the first week of April, four weeks earlier.
In the export market, two Turkish mills were heard to have sold about 150,000t of rebar to three southeast Asian buyers at the end of last week. Only three 50,000t Turkish rebar cargoes were heard to have sold to southeast Asia in the entirety of March and April.
At least two Turkish mills have sold to US importers for June shipment. The convergence of rebar demand from multiple overseas markets, coinciding with increased Chinese and US domestic steel demand, has driven Turkish scrap demand higher.
The increase in scrap demand pushed the Argus monthly cfr Turkey price range up from $207.00-256.50/t in April to $241.00-252.50/t in May.
Turkish mills' most recent scrap import purchases, concluded at higher prices yesterday, are expected to reflect the strong opportunity for Turkish mills to sell high volumes of billet for export. Chinese importers' purchases keep global availability limited, and the sharp rise in CIS billet prices puts Turkish mills in a strong position of price arbitrage, particularly in the local market where supply is limited. The two Iskenderun mills purchased deep-sea scrap yesterday, and both are expected to be targeting billet sales locally. A local customer of one of the mills said it could not sell billet today at $370/t ex-works. The second Iskenderun mill closed its local rebar sales this morning until 27 May.
