Turkish ferrous scrap importers reduced their purchases of deep-sea bulk cargoes in June in response to lower rebar demand domestically and overseas and the previous record-high buying levels for June shipment.
Argus' cfr Turkey steel scrap assessment stood at $499.80/t cfr on 1 June, dropping by only 80¢/t over the month to $499/t cfr on 30 June. Despite the decline in purchasing rates, mills were not able to push prices down to any significant extent because of extremely strong demand for scrap in the US and Europe relative to flows that were only steady.
Turkish mills were recorded to have bought only 23 deep-sea cargoes in June and are estimated to have purchased only 28-29 cargoes. This is down from the 28 cargoes recorded to have traded in May, when the total estimate stood at 35-40 cargoes.
US and Canadian exporters accounted for 11 of these 23 cargoes recorded to have traded into Turkey in June, almost half of the deep-sea tonnage that the mills purchased during this period. North American exporters accounted for a low 7pc of the total number of cargoes that Turkish mills purchased in May.
Baltic exporters accounted for only two of the 23 cargoes recorded to have traded in June, and similar to the change in US trading volumes month on month, Baltic exporters are expected to trade the greatest volumes with Turkey in July. Not only have Baltic exporters sold little material to Turkey for several weeks, they also have maintenance periods scheduled for August, which is why several sellers from this region are looking for sales to Turkey at the start of July.
Five Russian cargoes were traded in June, along with three UK cargoes and three continental European cargoes, according to Argus'records.
Continental European tonnages traded into Turkey in July are expected to remain at low levels because of sustained heavy demand from European steelmakers. Many regional exporters also do not want to sell ahead to Turkey going into the summer months when it could become riskier to do so as they move into a period when scrap flows usually tighten.
Two of the largest continental European exporters are heard to have already sold product for August shipment on a confidential basis to Turkey, but the region's medium-sized exporters have all reduced their sales lead times. None of them are heard to have sold August shipment to Turkey at the start of July, whereas in the second quarter of this year, many of them sold 6-7 weeks ahead.
Turkish mills spent the second half of June largely withdrawn from buying deep-sea scrap cargoes, with about 70pc of their purchases done in the first half of that month. The lower purchasing rates in the second half of June buoyed expectations that mills will increase their buying in the first half of July, particularly because there is a national holiday in the second half of this month.
Increased Turkish domestic rebar demand in the second half of this week also indicates scrap-buying patterns will strengthen next week. One mill was heard to have sold 55,000t of rebar in the past three days locally and other mills are also selling material again, at attractive prices of about $705/t ex-works, excluding value-added tax.
