Turkish steel mills have remained mostly out of the deep-sea
scrap markets, booking only two deep-sea cargoes in the past
two weeks, while demand in Taiwan and the USA was also
The Turkish market has been quiet in the past two weeks amid
the political uncertainty surrounding the constitutional
referendum held on April 16, while suppliers in the Europe were
on their Easter holidays.
Only two deep-sea deals were heard recently.
A steel producer in the Izmir region booked a Baltic Sea cargo,
comprising 21,000 tonnes of HMS 1&2 (80:20) at $265 per
tonne, 5,000 tonnes of bonus at $275 per tonne and 1,000 tonnes
of rail at $280 per tonne cfr, on April 14.
The same mill booked a second Baltic Sea cargo, comprising
30,000 tonnes of HMS 1&2 (80:20) at $267 per tonne and
5,000 tonnes of bonus at $277 per tonne cfr, on April 12.
Market participants expected mills to resume their deep-sea
scrap purchases after Turkey’s referendum.
Some 51.30% of votes were cast to approve the package of
constitutional amendments put forward by the ruling Justice
& Development Party (AKP) that will create an executive
presidency to replace the parliamentary system.
However, both the scrap and finished steel markets remained
quiet after the referendum result was known.
"Everybody is asking about the market, but there is no trade
activity at the moment," a Turkish source said.
"Turkish mills should begin buying scrap again as stocks are
low," another Turkish source added. "There are offers from
various sources at around $275 per tonne cfr for HMS 1&2
(80:20) but there are no takers."
The US bulk ferrous scrap export market remains at a standstill
with no trades heard off either coast, although increased container sales to India
provided some buzz in an otherwise stagnant market.
No cargoes have been sold from the US East Coast to Turkey
since early April, when a bulk deal was made at $276 per tonne
cfr for HMS 1&2 (80:20) scrap, $281 per tonne cfr for
shredded and $286 per tonne cfr for bonus-grade scrap.
"Turkish rebar selling prices are dropping because of low
demand and the weakness of the lira. But I think their scrap
imports won’t be [affected] in the short term,
because they need material," an international trading source
"It is a rather directionless market right now. If you look at
global macro factors, [the price of] iron ore is down
significantly, we are seeing a dramatic drop in Chinese steel
prices, and we have heard about Chinese billet [being] offered
into the Middle East," a second trading source said.
These uncertainties sent many market participants to the
sidelines to weather the storm, with no indication of where
offer prices currently stand.
Sources said that inventory levels at docks have been low and
that there was not enough material on the ground to quickly
fill a vessel.
Despite the lack of activity in bulk exports, there has been
improved demand from Indian buyers over the past two weeks.
Market participants indicated that containerised shredded scrap
has been trading actively at $265-280 per tonne fas on the US
East Coast and US Gulf Coast.
"The Indians are in 'buy’ mode, and that is always
a positive sign. If they are buying at those prices for
shredded in a [container], it suggests that bulk prices could
head that way," a third trading source said.
Import prices for containerised HMS-grade ferrous scrap in
Taiwan have fallen for the sixth consecutive week, with the plunge in China’s billet and long
adding further pessimism to the market.
Market sentiment in Taiwan has been affected by the lower
prices for steel products in China, particularly billet, which
approached numbers close to $400 per tonne cfr in Southeast
Asia early this week.
Even though bookings had yet to be heard in the market, the low
offers have resulted in a "difficult moment" for Taiwanese
billet re-rollers and electric arc furnace (EAF) mills, one
Taipei-based trader said.
"They don’t know whether they buy [billet] or
not," the trader said, adding that bids were nevertheless heard
at $370-375 per tonne cfr.
A second trader said that whenever the price gap between
imported billet and imported ferrous scrap is lower than $150
per tonne, some Taiwanese EAF operators would consider booking
the semi-finished steel product.
This is because the average cost to convert scrap into billet
in Taiwan has been around $150 per tonne.
"The scrap market is bad everywhere – but Taiwan is
definitely the worst," one local trader pointed out, saying
that transaction prices for imported containerised cargoes in
the East Asian island were the lowest in the region.
Turkish domestic ship scrap prices increased at the beginning
of the week as mills raised their purchasing prices in line
with stronger demand, while auto bundle scrap prices remained