The Turkish scrap import price decreased today on a deep-sea deal concluded this morning and a lower bid-offer spread in the afternoon.
The Argus daily steel scrap HMS 1/2 80:20 cfr Turkey assessment fell by $5.20/t to $434.80/t.
The China physical steel complex was strong today after yesterday's increase in rebar futures, which still gives expectation that scrap import prices can recover once more April shipment supply is sold.
Some deep-sea scrap suppliers said earlier this week that lower prices were expected to come for April shipment this week but think scrap prices can recover when more May shipment trading occurs and once some of the April shipment supply is flushed out.
A Russian supplier sold 30,000t of HMS 1/2 80:20 at $437/t and bonus at $447/t cfr Marmara this morning for first half of May shipment.
A Baltic supplier was heard to sell HMS 1/2 80:20 at $437/t and bonus at $447/t cfr Iskenderun mid-week for April shipment, financed by another supplier.
Another negotiation today was heard to fall apart on lower price expectations from the buyer.
Three flats producers inquired about May shipment today, particularly for prime grade material, three large suppliers confirmed. Flats producers are not looking for April shipment anymore, and they have extended their scrap purchasing lead times because of the maintained strength of hot-rolled coil demand.
The available scrap supply for April shipment still outweighs the demand indicated for this period by rebar producers, and a bid-offer spread for this period was heard at $430/t cfr, compared with $435/t cfr for Russian HMS 1/2 80:20 today. Two US exporters are turning back to Mexico and South America amid inquiries from there.
Turkey's domestic rebar market sees no strength in the scrap import market yet, and despite the lira weakening against the dollar this morning, stockists were still trying to sell their material to end-users today.
The Iskenderun local rebar market tends to react more aggressively than Marmara and Izmir markets to periods of market uncertainty, and Iskenderun stockists' prices fell to the equivalent of around $616/t ex-works excluding value-added tax (VAT). Iskenderun mills have finally reacted to traders' movements this week, because lower-priced scrap deals have been advertised to the steel market, and offered the equivalent of TL5,580/t ex-works including VAT, equivalent to $624.70/t ex-works excluding VAT today. In Izmir, stockists' prices were down to around $620/t ex-works, and in Marmara they were closer to $625-630/t ex-works.
The majority of continental European exporters are pushing dockside sub-suppliers for lower numbers, and there is expectation that they will receive some flexibility at the start of next week. An Egyptian mill was heard to buy either UK or continental European HMS 1/2 material at $430-435/t cfr. Some regional exporters as a result see an upcoming buying opportunity considering the view that the market will recover somewhat after lower-priced deals occur for prompt shipment into Turkey.
The lack of clarity surrounding Turkish rebar producers' maintenance schedules during Ramadan, and the possibility that mills will only need to steadily buy remaining April shipment and some May shipment cargoes, indicates that sufficient supply will be offered throughout the first half of next week.
A strong round of restocking from Turkey's rebar market is still expected this month, before Ramadan. The levels of the expected local rebar demand will play a large part in how Turkish rebar producers' scrap demand recovers later this month and how it potentially affects upward pressure on the scrap price. The Chinese steel market will also be closely watched early next week to see if it remains firm, after iron ore prices dropped today, reversing yesterday's gains.
Romanian HMS 1/2 80:20 exporters expect that they may need to trade at $410/t cif Marmara or below early next week if demand remains calm from the Turkish importers.
The Argus daily A3 cif Marmara steel scrap assessment decreased by $2.50/t to $412.50/t cif today.
