The Turkish scrap import price decreased today as at least one continental European supplier cut its offer closer to Turkish bids, but the market looked to be nearing a floor to the latest downturn in the wake of Chinese region Tangshan's announcement of steel production cuts through to December, and stronger local rebar indications in Turkey.
The Argus daily HMS 1/2 80:20 steel scrap HMS 1/2 80:20 cfr Turkey assessment decreased $2.50/t to $420/t. A continental European supplier was heard to have dropped its offer to the equivalent of $425/t cfr for premium HMS 1/2 80:20, while Turkish mills held bids at $415/t.
Mills are attempting to find a bottom scrap price level, which will likely trigger an uptick in prices when mills start buying as supply is not outweighing demand as much as earlier this week.
Turkish mills are largely targeting continental European scrap for their upcoming purchases in order to blend with the significant amount of premium-quality Baltic material they have purchased so far in March. Only four of the last 32 deep-sea trades tracked into Turkey in the past 30 days have been of continental European-origin.
Some continental European scrap was sold to Egypt in the past 10 days and there were several offers from Europe to Turkey in the market today.
Steelmakers sought slightly lower prices from continental European suppliers today but it is largely not in the mills' interests to push prices much further down. They particularly do not want to give indications of lower scrap prices to the local steel market.
Turkish domestic rebar demand increased today in Izmir after a regional mill sold 30,000t locally at TL5,250/t ex-works including VAT, equivalent to $611.90/t ex-works excluding VAT, at an exchange rate of TL7.27:$1. The Izmir mill closed the sales by the middle of the day. Other Turkish mills will use the price as a barometer for rebar sales early next week.
Stockist demand in Marmara was weaker than in Izmir today, as those regional traders are waiting for the lira-USD exchange rate to stabilise after Turkey's Central Bank yesterday hiked its benchmark interest rate.
Despite some intra-day volatility, the lira was little moved at TL7.26:$1 at 15:00 GMT compared to TL7.27:$1 this morning, which began to stoke optimism that the currency is stabilising. But steel stockists wished to wait for Monday indications to ensure that the volatility has eased off before they evaluate their purchasing strategy.
The lira's appreciation against the dollar yesterday also helped stockists to profit from sales to end-users in the past week, which means they have increased requirement to replenish stocks with new material. If exchange rates do stabilise or the lira weakens early next week, stockists in all major Turkish steel sales regions will be ready to buy.
Iron ore and hot-rolled coil futures (HRC) in China moved in opposite directions today after Tangshan announced curbs on steelmaking operations for 23 mills that were deemed to have fallen short of meeting emission control targets so far this year. The restrictions, contained in a draft document released today, will apply from 20 March to 31 December and penalize mills that have so far failed to meet emission control targets.
This shows strong prospects for firm Turkish scrap import prices throughout the year as Chinese steel supply and price indications give leading indications for Turkish steel sales abilities and in turn, Turkish scrap import price direction.
A UK supplier was heard to sell scrap to Italy in the middle of this week. One Brazilian import inquiry for scrap is still active, and a Venezuelan supplier received demand from Mexico.
An Egyptian mill indicated a maximum bid level of $425/t cfr for premium HMS 1/2 80:20 to one supplier. Bangladesh and Korea bought two cargoes each from the US in mid-week, although this does not affect US east coast supply, which is still apparent for April shipment.
A total of 19 deep-sea cargoes have been recorded traded in March, and a total of 22 deep-sea cargoes for April shipment. Three cargoes have traded for May shipment so far.
Short-sea scrap prices into Turkey moved higher today. One Bulgarian exporter targeted a sale around $395/t cif Marmara today but most Bulgarian sellers are now holding out for $405/t.
A Ukrainian supplier indicated it would not sell HMS 1/2 90:10 below $425/t.
Coaster freight rates from Rostov to Diliskelisi have fallen strongly in the past two weeks because of corn/grain tenders that have attracted more vessels to the region. Freight rates on the route dropped to $27/t in the middle of this week, from around $33/t the previous week, and from around $40/t in the prior week.
The Argus daily A3 cif Marmara steel scrap assessment increased $3/t to $395/t cif today.
