Turkey ferrous: Price up on US deal
The Turkish scrap import increased on Thursday on a US sale to an Izmir mill for end of July shipment concluded yesterday.
The Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment increased $4/t to $499/t cfr.
A US supplier sold 10,000t of HMS 1/2 80:20 at $499/t, 16,000t of shred at $519/t and 2,000t of bonus at $519/t cfr Izmir for end July shipment yesterday.
Turkish mills had attempted to stay out of the market over the past week in an effort to push premium HMS 1/2 80:20 prices down to the low $490s/t cfr Turkey but offers remained firm at $500/t cfr, forcing buyers to lift bids. Turkish domestic rebar and billet demand also strengthened over the past day to support mills' scrap bid levels.
Premium HMS 1/2 80:20 offers were heard to remain at $500/t cfr Turkey following on from the new deal. Because scrap market consensus had grown yesterday that Turkish mills will be in the full flow of August shipment purchases next week, suppliers have also been able to maintain offers at unchanged levels.
Some suppliers have been forced to maintain export offer levels because of the losses that would have been made at lower sales levels based on current high dockside purchasing prices. Continental European exporters' offers have remained largely off the market in the past 10 days because of the strength in offers from their own suppliers.
Increasing Chinese domestic physical steel prices this week in addition to a stronger euro against the US dollar have both reversed the patterns of last week also.
Scrap supply fundamentals are driving the strong market and Turkish mills have lost around $10/t from their scrap-rebar margins across domestic and export rebar markets according to this latest US deal.
Argus' cfr Turkey steel scrap assessment has increased $3/t from $496/t cfr to $499/t cfr in the past week, while Argus' weekly Turkish domestic steel rebar assessment fell the equivalent of $9.80/t on the week.
Deep-sea scrap exporters still remain optimistic about potential price upside as they do not see any possibility for scrap fundamentals to weaken and supply to increase in July and August as US and European domestic markets are already showing strong demand for these months. This could mean Turkish mills' scrap-rebar margins have already peaked for the rest of the summer period.
The steel complex could also start to strengthen again today following news that Russia may potentially impose 15pc base export duties on exports of ferrous products with additional tariffs on top from 1 August to 31 December.
If the final approval is issued and scrap is confirmed to be subject to this duty, this could have huge knock-on effects in terms of limiting scrap availability to Turkey in certain market conditions while also significantly limiting Turkey's seaborne steel competition into regions such as Africa, the Middle East and southeast Asia, either of which would place upward pressure on scrap prices.
Turkish mills started receiving better demand for their rebar locally today, which indicates that scrap-rebar margins are also not under so much pressure. Turkish domestic rebar stockist consensus grew yesterday that prices could not fall below $700/t ex-works. An Izmir mill was heard to sell more than 5,000-8,000t of rebar locally today at TL7,210/t ex-works including VAT, equivalent to $705.50/t ex-works excluding VAT. Traders showed better demand in Marmara, Izmir and Iskenderun today with Marmara mills‘ offers flat at around $725/t ex-works excluding VAT.
Domestic billet demand also increased sharply, with Iskenderun material heard sold at $695/t ex-works excluding VAT in large volume to several buyers today and yesterday, a highly competitive price level against today's scrap price.
Several short-sea scrap suppliers to Turkey expected earlier this week that there would be a dramatic recovery in bid levels by next week following sharp falls in some suppliers' sales earlier this week. Bid levels began to recover already today, with bids at $455/t cif Marmara for HMS 1/2 80:20.
The Argus daily A3 cif Marmara steel scrap assessment increased $12.50/t to $460/t.
Related news posts
Japan’s Nippon Steel halts output at Kimitsu plant
Japan’s Nippon Steel halts output at Kimitsu plant
Tokyo, 15 April (Argus) — Japan's largest steel mill Nippon Steel has partially suspended production today at its Kimitsu plant in eastern Chiba prefecture because of operational issues. Nippon Steel suspended production at some of its blast furnaces in the plant on the back of operational issues, said the company, without disclosing further details. The suspension is temporary, a company representative told Argus , although it remains unclear when the plant will resume production. Operational issues can come in a variety of forms, the representative added, including the quality of the raw materials. The firm has not disclosed output volumes at the Kimitsu plant. Nippon Steel's overall crude steel output for the April 2023-March 2024 fiscal year is estimated at 35mn t , according to the firm, up by 2.2pc from a year earlier. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
G7 leaders to meet over Iran's attack on Israel
G7 leaders to meet over Iran's attack on Israel
Dubai, 14 April (Argus) — Leaders of the G7 will meet today, 14 April, to co-ordinate a diplomatic response to Iran's overnight air attack on Israel, which ushered a new phase in a six-month conflict that is threatening regional escalation. G7 presidency Italy "has organized a conference at leaders' level for the afternoon of today," Italian prime minister Giorgia Meloni said on X, formerly Twitter. US President Joe Biden has pledged a co-ordinated G7 diplomatic response and condemned the Iranian assault. Iran fired hundreds of drones and missiles against Israel on the evening of 13 April, according to the country's state-owned news agency Irna. Almost all were intercepted before they reached Israeli airspace and there were no fatalities reported by Israel. One civilian was injured and an air force base in southern Israel was lightly damaged, according to the Israel Defence Forces (IDF). The Iranian attack came in response to a suspected Israeli air strike on the vicinity of Iran's embassy compound in Damascus, Syria, on 1 April. Tehran's foreign minster Hossein Amir-Abdollahian said Iran considers this to be the end of its operation. But energy markets, which have been supported in recent weeks by a geopolitical risk premium, will face a week of uncertainty about whether Israel will retaliate. The front-month June Ice Brent contract was trading at $90.45/bl before markets closed for the weekend, and hit a more-than five month high of $92.18/bl on Friday, 12 April. Israeli officials said the attack was "a severe and dangerous escalation" from Tehran. Israel's war cabinet is meeting today to discuss a response. "We will build a regional coalition and exact the price from Iran in the fashion and timing that is right for us," said cabinet minister Benny Gantz. The US is urging Israel to claim victory for its defence, in an apparent effort to discourage Israeli prime minister Benjamin Netanyahu's government from feeling compelled to retaliate. While noting that Israel ultimately will make the decision as to how to respond, White House national security communications co-ordinator John Kirby, in a televised interview today, hailed what he called Israel's "incredible military achievement" in defending itself against the attack. Very little managed to penetrate the defensive shield, "and the damage was extraordinarily light," he said. The US military played a role in helping to defend against the attack, bringing down "several dozens of drones and missiles," Kirby said. UK prime minister Rishi Sunak said the Royal Air Force shot down "a number of Iranian attack drones". Israel's western allies are urging it to show restraint as they try to prevent a wider conflict in the Middle East, which could directly affect oil producers and send energy prices soaring. President Biden is especially keen to avoid such a scenario in an election year. By Bachar Halabi and David Ivanovich Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Gunvor set for buying spree after windfall: CEO
Gunvor set for buying spree after windfall: CEO
London, 12 April (Argus) — Trading firm Gunvor plans to use part of a massive earnings windfall over the past two years to build out its asset base, its chief executive Torbjörn Törnqvist told Argus . "Today, we are under-invested in assets so we will change that," Törnqvist said, adding that investments would be broad based and to some extent opportunistic. "We will employ quite a lot of capital in investments." Independent commodity trading companies are sitting on unprecedented piles of cash after two years of bumper earnings arising from supply chain disruptions and market volatility. While Geneva-based Gunvor is smaller than its peers Vitol, Trafigura and Mercuria, it is still a huge company by most metrics. It reported revenues of $127bn in 2023 and a profit of $1.25bn, following a record $2.36bn in 2022. It has kept most of its earnings in house and had an equity position of almost $6.16bn by the end of 2023 — its highest ever. Törnqvist is eyeing further growth. "We will definitely be a much bigger company, that I can say," he replied when asked where he saw Gunvor in 10 years' time. "I think we will grow in tune with the [energy] transition." Trading firms are looking for ways to keep their competitive advantage, particularly given the uncertainties associated with the energy transition. One emerging trend is an appetite for infrastructure. Vitol is in the process of buying a controlling stake in Italian refiner Saras, which operates the 300,000 b/d Sarroch refinery in Sardinia. Trafigura said this week that it is in talks to buy ExxonMobil's 133,000 b/d Fos refinery on the French Mediterranean coast. Part of the rationale behind these moves is to increase optionality and take advantage of the loss of Russian products to the European market, as well the closure of large chunks of local refining capacity. Gunvor owns the landlocked 100,000 b/d Ingolstadt refinery in Germany and a 75,000 b/d refinery in Rotterdam, where it plans to shift away from fossil fuel use. "Many oil refineries have been up for sale and still are," Törnqvist said. Asked if Gunvor was looking for something similar, he said the company is interested in the "right opportunity" whether in upstream, downstream, midstream or shipping. "It all feeds into what we are doing and all supports our underlying trading," he said. But Törnqvist suspects a lot of Gunvor's growth will come from gas and power — areas where trading companies are already seeing rising profits. The company made its first investment in a power generation asset late in 2023, when it agreed to buy BP's 75pc stake in the 785MW Bahia de Bizkaia combined-cycle gas turbine plant in Bilbao, Spain. It has signed a slew of LNG offtake agreements in the past year and continues to grow its LNG tanker fleet . "We're building logistical capabilities in LNG," Törnqvist said. "Oil is here to stay" Törnqvist said Gunvor is well placed to navigate the energy transition, and is stepping up investments in renewables and biofuels and expanding into carbon and metals trading. "There will be disruptions, there will be different paths to the transition in different parts of the world which go at different paces and have different priorities and ways to deal with it," he said. "This will create opportunities." But Törnqvist is clear that oil and gas will remain an integral part of Gunvor's business. "We feel that oil is here to stay," he said. "And it will grow for several years." By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s Daihatsu to reopen Kyushu, Osaka car plants
Japan’s Daihatsu to reopen Kyushu, Osaka car plants
Tokyo, 12 April (Argus) — Japanese car manufacturer Daihatsu will resume operations at its Kyushu and Osaka plants from 6 and 7 May respectively, which will mark a full reopening of its domestic facilities. Production volumes at these plants were undisclosed. Daihatsu suspended all of its operations in December 2023 after it was accused of tampering with safety test results. It resumed partially in February but most of its production facilities, including its major plant in Osaka, remained closed. Daihatsu produced nothing in January and 6,692 units in February, less than one-tenth of its production a year earlier. This led to year-on-year declines in Japan's total car output in January and February . By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more