DAILY STEEL SCRAP: Prices rise again after trio of deep-sea deals

Turkish deep-sea scrap import prices pushed up again after three fresh cargoes were sold from the United States and Baltic Sea regions for May shipment, market participants told Fastmarkets on Wednesday April 7.

A steel mill in the Iskenderun region booked a Baltic Sea cargo, comprising 16,000 tonnes of HMS 1&2 (80:20), 8,500 tonnes of shredded, 4,500 tonnes of bonus, 3,500 tonnes of rail and a 2,500-tonne mixture of busheling and new cuttings at an average price of $436 per tonne cfr.
The price for the HMS 1&2 (80:20) element of the cargo was around $430-430,50 per tonne cfr, according to the buying party.
A steel producer in northern Turkey booked a US cargo, comprising 13,000 tonnes of HMS 1&2 (80:20), 16,000 tonnes of shredded and 2,000 tonnes of bonus at an average price of $439 per tonne cfr.
And a mill in the Marmara region booked a US cargo, comprising HMS 1&2 (80:20) at $433 per tonne and bonus at $443 per tonne cfr. The cargo breakdown was not immediately clear at the time of publication.
The previous deal was done on April 2, when a steel mill in the Iskenderun region booked a Baltic Sea cargo of 20,000 tonnes of HMS 1&2 (95:5) at $430 per tonne cfr.
After the three new deals, the daily scrap indices went up sharply on April 7.
Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was $428.85 per tonne, up by $7.35 per tonne.
And Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), US origin, cfr Turkey was calculated at $434.82 per tonne on April 7, also up by $7.35 per tonne, leaving the premium for US material over European scrap at $5.97 per tonne.
However, the increase in the prices may not last, as supplies instantly increased on news of the higher prices, Fastmarkets understands.
“The market improved in the morning with the news of these fresh cargo deals. However, the number of offers suddenly increased, which caused mills to withdraw from negotiations. A lot of suppliers are now willing to sell at latest deal levels, but I think we will see $427-428 per tonne cfr [for HMS 1&2 (80:20)] by Friday April 9,” a Turkish mill source told Fastmarkets.
“There is some demand for rebar in the export markets, but domestic demand for the material is still insufficient because the weak lira caused prices to go up sharply. Besides, cashflow in the local market is very low,” he added.
The Turkish lira started to decline two weeks ago, following the Turkish president's surprise sacking of the head of the country's central bank.
The Turkish lira was trading at 8.125 lira to $1 on April 7, compared with 7.200 lira to $1 on March 22, according to Oanda.com.
The weakening of the Turkish currency against the US dollar led to a rise in finished steel prices in the local market because mills in Turkey buy most of their raw materials in US dollars before selling them to the domestic market in the local currency.
The most recent rebar export deal was heard at $640 per tonne fob level on an actual-weight basis to Southeast Asia, sources said.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), export, fob main port Turkey, was $625-636 per tonne on April 1, up from $610-620 per tonne of previous week.
After the indices closed, another deep-sea deal came to light, with a steel mill in the Izmir region booking a European cargo, comprising 20,000 tonnes of HMS 1&2 (80:20), 11,000 tonnes of shredded, 8,000 tonnes of plate and structural (P&S) scrap and 2,000 tonnes of busheling at an average price of $433 per tonne cfr.

Cem Turken

cturken@fastmarkets.com

Published

Cem Turken

April 07, 2021

15:20 GMT

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