The Turkish scrap import price decreased on Tuesday on three deep-sea sales concluded today as US sellers continued to aggressively cut offers in order to secure deals.
The Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment decreased $4.60/t to $463.70/t cfr.
A US supplier sold HMS 1/2 80:20 at $464/t and shred at $479/t cfr Marmara for latest 20 September shipment today.
A Scandinavian supplier sold HMS 1/2 80:20 at $464/t and shred at $479/t cfr Marmara for early September shipment today. The Scandinavian supplier has not sold to Turkey for several weeks.
A second US supplier was heard to sell HMS 1/2 80:20 at $463/t and shred at $478/t cfr Marmara. The seller was understood to have held the last remaining August shipment cargo from the US throughout last week.
Chinese physical and futures domestic steel prices fell sharply for a second consecutive day on Tuesday but that is not likely to have been the major driver for the lower-priced scrap sales to Turkey today.
US sellers' willingness to sell lower was driven by strong flows of scrap across the US that have built expectation among exporters that they can drive their dockside prices down further. US exporters will also use the rapid increase in ferrous scrap freight rates from the US to Turkey last week as a driver to pressure dock prices downward. This will allow them to realise healthy profits on the new sales and on the late August shipment deals closed by US suppliers at $471-475/t cfr Turkey.
Another factor that weighed on the Turkish deep-sea market is expectation that supply from the Baltic and continental Europe for September shipment will be strong. Some Baltic exporters have moved their August shipment scrap allocation to September shipment, although again that is not a driver for the US exporters' sales.
Chinese steel market sentiment remained bearish today as some participants started to doubt whether the output cuts announced at the beginning of July would be carried forward, as the central government gave signs of pursuing a less aggressive decarbonization policy.
There is also now uncertainty over whether China's rumoured tax on rebar exports is actually required given that Chinese rebar has not been exported in large volumes since January. The lack of clarity on Chinese policy means that many Asian market participants held a wait-and-see attitude to new steel trading activity on Tuesday, and Turkish mills are now mostly holding off from scrap purchases in the hope they see clearer indications from China later this week.
Several Turkish mills thought there would be a Chinese export steel tax implemented on 1 August and also did not expect Chinese domestic steel prices to fall this week.
The Argus daily HMS 1/2 80:20 (short-sea) cif Turkey assessment was flat at $440/t today.
