The Turkish scrap import price decreased on Tuesday as mills continued efforts to attract premium HMS 1/2 80:20 prices into the $450s/t cfr, buoyed by Egyptian mill bids below $450/t cfr for UK HMS 1/2 80:20.
The Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment decreased $4.80/t to $456.50/t.
Turkish mills bought a substantial volume of material last week for September shipment. Over 14 deep-sea cargoes have already traded for September shipment but a lack of rebar demand has allowed mills to attempt to push prices further down this week, particularly for cargoes comprising close to full HMS material. Cargoes that carry significant volumes of shred material will be much more difficult to find at lower price levels than today.
Egyptian mills look set to secure several of the HMS-only cargoes at lower prices this week. But these purchases are for relatively prompt shipment, and deep-sea scrap exporters in Europe and the UK will still need to find homes for large volumes of HMS for second half September shipment, potentially via Turkey.
Some continental European exporters are calculating that they will be able to attract average stock price levels for HMS 1/2 at €335/t delivered to dock by the time they have to load September shipment cargoes to Turkey. Flows could increase towards the end of August at the back end of the European holiday season, and the weaker euro against the US dollar is also encouraging exporters to follow the Turkish scrap import price down for September shipment trading.
Strong Turkish scrap purchasing appetite last week was during a period in which Turkish domestic semi-finished and finished steel demand increased but then subsequently subsided on Friday after the lira deteriorated against the US dollar.
The lira/USD rate was very volatile on Tuesday ahead of a Turkish Central Bank announcement on interest rates this coming Thursday. Several Iskenderun mills were willing to sell locally today at TL7,000/t ex-works including VAT, equivalent to $686.60/t ex-works excluding VAT.
Turkish mills have the opportunity to sell rebar to southeast Asia at $685/t fob on actual weight basis but they now want to achieve scrap purchasing prices below $460/t cfr Turkey in order to maintain scrap-rebar margins of $230-240/t for large tonnage sales to destinations such as Singapore and Hong Kong.
Argus' daily fob Turkey steel rebar assessment decreased $5/t to $692.50/t fob on actual weight basis today. Indian offer levels are rising, and Turkish mills are putting themselves slowly back into a position where they will be the most competitively-priced exporter into southeast Asia for October shipment, particularly considering the sizeable tonnages they can offer. October rebar futures rose almost 2pc today in China.
The Argus daily HMS 1/2 80:20 (short-sea) cif Turkey steel scrap assessment decreased $2.50/t to $425/t on Tuesday on lower bid-offer indications.
