The Turkish scrap import price rose today on a US sale to an Iskenderun mill yesterday for May shipment, as flat steel producers began to request June shipment cargoes from some deep-sea scrap suppliers.
This comes at a time when Turkish rebar producers have rejected a bid at the equivalent of $645/t fob from Hong Kong - the highest price paid by southeast Asian buyer in December 2020 or March 2021 when prices hit historical records. The bid was at $690/t cfr Hong Kong on actual weight basis, with freight rates estimated to have fallen to $45/t, and both June and July shipment are being discussed with traders.
The Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment increased 60¢/t to $433/t cfr today.
A US supplier was heard to sell a total of 31,000t consisting of HMS 1/2 80:20 at $433/t, 3,000t of shred at $438/t and bonus at $443/t cfr Iskenderun for May shipment.
Several deep-sea scrap suppliers look set to target sales in the coming days in a $435-440/t cfr Turkey range for premium HMS 1/2 80:20, with sales appetite reflective of the ample amount of scrap available currently, including from the US.
More deep-sea deals were heard concluded between end of last week-early this week. A total of 14 May shipment cargoes have traded so far, according to Argus records, but the total number could be close to 20, meaning mils are already close to half-way through their May shipment purchasing requirements.
Turkish mills see advantage to stock up already on June shipment cargoes in respect to the strong export rebar and hot-rolled coil demand for lengthy lead times. Slab prices for flats producers are also at far higher levels relative to scrap prices. But it appears riskier for any deep-sea scrap supplier to sell a June shipment cargo today compared to a mill purchasing June shipment in respect to what could happen to dockside purchasing prices in the coming weeks because of the strong global steel demand. This would particularly be the case if a supplier has not collected any material for such a potential cargo sale.
The multiple sales by UK and European scrap exporters for May shipment at lower prices could place additional upward pressure on dockside purchasing prices, which may subsequently put even sharper upward pressure on scrap export prices to Turkey in April, particularly if global scrap demand increases sharply. As long as Turkish mills' scrap demand remains steady, there is less chance that those scrap suppliers which have sold multiple cargoes for May shipment will have to rush for material and effect upward dockside price pressure. If Turkish domestic rebar demand remains relatively weak, this could keep Turkish scrap demand steady. There are still a few continental European suppliers which are in a different situation, having not sold any May shipment to Turkey yet. Only a couple of suppliers from the Baltic regions and a continental European supplier are verging on June shipment, as they appear to be close to being sold out for May shipment.
Turkish mills' rejections to the record overseas rebar bid levels gave a sense of how strong global markets have become again, which have mainly been developed by the strength of the Chinese steel market at the end of the first quarter-beginning of the second quarter. Turkish export billet sales last week to China at $580-586/t fob also shows how demand in China has strengthened in recent weeks.
Turkish domestic rebar trading has commenced in the past couple of days and if that market's demand can strengthen, it could make quite an explosive impact on Turkish scrap import demand. But end-users currently largely find the lira-denominated prices too expensive. Domestic demand in Marmara, Izmir and Iskenderun was slower today than yesterday. Coinciding with the Marmara mill sales at $625/t ex-works yesterday, an Izmir mill was heard today to have yesterday sold around 30,000t of rebar locally at $615/t ex-works. Today the Izmir mill offered $620/t ex-works.
Short-sea scrap offers from western Black Sea regions were firm at $415/t cif and above. Most offers from other origins were also above $415/t cif now.
The Argus daily A3 cif Marmara steel scrap assessment steel scrap assessment increased $1.30/t to $413.80/t cif today.
