WEEKLY SCRAP WRAP: Global prices fall, markets await next Turkish move

Global ferrous scrap prices continued to tumble in the week from Monday January 22 to Friday January 26, amid poor demand for Turkish rebar and weaker sentiment among traders.

Turkey imports
Two fresh Turkish import deals were heard this week, with prices showing a further decline after last week’s drop.
A steel mill in the Iskenderun region booked a US cargo, comprising 12,000-15,000 tonnes of plate and structural scrap (P&S) at $373 per tonne and 6,000 tonnes of shredded at $368 per tonne, while the rest of the 38,000-tonne cargo was HMS 1&2 (80:20) at $363 per tonne cfr.
Those prices were down by $7 per tonne from the preceding cargo from the US East Coast, which traded to Turkey at $370 per tonne cfr on December 22.
A steel mill in the Marmara region then booked a Baltic Sea cargo, comprising 9,000 tonnes of HMS 1&2 (80:20) at $354 per tonne, 16,000 tonnes of shredded at $359 per tonne and 6,000 tonnes of bonus at $364 per tonne on January 24.
“I expect the mills in Turkey to book at least six or seven cargoes for February shipment,” a Turkish mill source said.
“It seems like Turkey has found a new market level, with a lot of dealers waiting to see if US vendors sell [at prices] below $360 per tonne cfr for HMS 1&2 (80:20),” one US source said.
US exports
Export yard buying prices and containerized shredded scrap prices along the United States’ East Coast came under downward pressure after recent cargoes sold into Turkey, market participants said.
Sources speculated that the Turkish cargo represented one US exporter’s attempt to “stir the market” by lowering bulk sale prices to Turkey, which would allow it to lower its dock buying prices on the East Coast.
Meanwhile, market participants were calm in the face of the fall in Turkish export prices. Some believed that there was still a little downside left to prices, while others said that US bulk export prices had reached a temporary floor.
“[Export prices to Turkey] could come down a little more. Prices often overshoot the top and the bottom of the market,” an export source said. “$350 to $360 [per tonne] is probably the Turkish market’s price point right now.”
But a second export source disagreed, noting that a shortage in the overall market due to the recent cold weather could keep bulk prices at current levels. “I don’t think there are ready cargoes, begging to be sold on the East Coast, and I don’t expect to see sales done below $360 [per tonne],” he said.
US exporters were fast to react to the dip in bulk cargo pricing, by lowering export yard buying prices immediately after the most recent sale to Turkey. Market participants were warned that prices could be cut further late this week or early next week.
Exporters in the Boston region trimmed buying prices for HMS 1 by $10 per gross ton to $285 per ton, while Philadelphia docks cut prices by $15 per ton to $300 per ton, and those in the New York area fell by $20 per ton to $295 per ton.

Lee Allen

lee.allen@fastmarkets.com

Published

Lee Allen

January 26, 2018

18:20 GMT

London