Turkey ferrous: Price down as supply weighs

The Turkish scrap import price moved down on a Canadian sale concluded yesterday as healthy deep-sea scrap availability put pressure on the recent uptrend.

Turkish mills look set to continue to achieve steady rebar and billet sales, which will likely ensure they maintain a sustained requirement for scrap cargoes and limit the possibility of any significant new price fall.

A Canadian supplier sold 35,000t of HMS 1/2 95:5 and 15,000t of shred at an average price of $436/t cfr Iskenderun for May shipment.

The Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment decreased $3.40/t to $429.60/t cfr.

The Canadian supplier was heard to sell another cargo to another Iskenderun mill mid-week, at a slightly higher price.

The Turkish scrap market has fluctuated in the past month irrespective of the strength of the steel market.

Only two weeks ago, the scrap market turned more advantageous for sellers but by the end of this week the pendulum started to swing back towards buyers.

Strong sales appetite appeared when the market started to rise two weeks ago, which allowed mills to cover their immediate needs very quickly.

A total of 27 deep-sea cargoes have been recorded traded in the past 16 days, for both May and April shipment. More confidential deals were confirmed today to have concluded last week, with a total of 18 May shipment cargoes now recorded traded.

Sales appetite was still strong today with several offers in the market. The volume of sales done in the past two weeks has not yet alleviated supply, potentially because a seasonal increase in scrap flows has boosted exporters' availability.

Turkish mills have little interest to push scrap import prices down sharply but are optimistic that if they could achieve a small decrease next week it would have minimal impact on their steel sales prices, particularly rebar. The strong volume of rebar and billet sales concluded in the past two weeks look to have been covered through scrap purchases in the past 10 days.

But it is still possible that a further strengthening of steel prices could lend renewed support to scrap prices even as scrap-rebar spreads continue to widen.

Domestic steel demand in Turkey could strengthen if an announcement by the Turkish Central Bank on interest rates on 15 April is favourable to the lira-dollar exchange rate. And more export rebar and billet sales could be made over the coming days given the continued uptrend in Chinese prices.

An Iskenderun mill yesterday sold domestic billet at $585/t ex-works to three customers, one lot for 10,000t, which means it may have to soon cover those deals with another deep-sea scrap purchase. Argus' daily fob Turkey steel rebar assessment stood flat at $642.50/t fob today.

Turkish mills are already halfway through their May shipment scrap purchasing requirements and have indicated they expect to receive June shipment offers in as early as 10 days' time. They have already started to make June shipment inquiries.

The margins on display when considering Turkish export rebar prices suggest scrap import prices should not be under pressure, but as well as the availability of scrap, current Turkish domestic rebar demand is indicating a temporary peak at a maximum of $625-630/t ex-works while the lira is relatively stable at around TL8.15:$1.

There were no new short-sea Turkish scrap import indications today, leaving the Argus daily A3 cif Marmara steel scrap assessment flat at $413.80/t.