Turkey ferrous: Price flat, downside limited

The Turkish scrap import price was flat on Tuesday as several deep-sea suppliers looked to make a sale against weaker demand, but price downside appeared limited in the face of renewed strength from the Chinese steel market.

The Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment was flat at $429.60/t cfr today.

Premium HMS 1/2 80:20 offers were made at $430/t but no bids from Turkish mills were heard. Mills expect they will be able to secure several deals in the mid-high $420s/t cfr for the next May shipment purchases because of healthy availability for this period.

The appetite among some exporters to sell this week despite a potential imminent strengthening of fundamentals is driven by several factors. Any exporter that already sold at $435-437/t cfr Turkey for May shipment may be willing to sell in the mid-high $420's cfr this week to ensure its average price for this period is strong without needing to depend on a renewed upturn in the market.

And any exporter that sold in the last month at $414-415/t cfr Turkey and missed out on a second sale around $435/t last week may have to settle for a sale in the mid-high $420s/t cfr just in case the price uptick does not materialise.

But Turkish mills look to be preparing for a price floor this week in the $420s/t cfr, higher than the $414-415/t cfr floor for late April-early May shipment trading, which reflects strongly positive steel complex indicators moving into Q2 2021.

Two leading Chinese rebar producers today offered $805/t fob on theoretical weight basis on the assumption of the 13pc tax rebate being completely removed. More producers offered today on a zero-tax rebate basis.

If Chinese steel mills are making the correct assumptions, Turkish scrap import demand will very likely shoot up on those terms.

Chinese domestic rebar prices increased Yn40/t today, reversing the losses of yesterday, and although prices have moved through a very volatile period in the past week there look to be strong signals for the remainder of April.

The strength of the Chinese domestic market can be seen in respect to the influence semi-finished exports from southeast Asia to the mainland are having on containerised scrap prices. Argus' daily containerised HMS 1/2 80:20 cfr Taiwan assessment increased $3/t to $423/t today, resulting in a spread of only $6.60/t to the Turkish bulk import assessment.

June shipment imported scrap trading into Turkey could start as early as the beginning of next week, and Turkish rebar producers may be interested to buy early based on the potential for export rebar prices to increase. Two Turkish mills expect seaborne rebar prices to continue to rise after they decided not to sell material in a $640-645/t fob range last week.

Steel purchases by Turkish domestic rebar stockists and end-users are on hold this week as they wait for the latest Turkish Central Bank announcement on interest rates, expected on 15 April.

Overall strong global scrap demand outside of Turkey continued to push dock prices higher today, particularly in continental Europe. Regional exporters found it difficult to buy HMS 1/2 material at €325/t delivered to dock today.

An Egyptian tender is in place for tomorrow, with around 80,000t requested by three mills, for latest 5-10 May shipment. Egypt remains behind on its bookings relative to the shipment periods Turkish mills are focused on.

In the short-sea imported scrap market, Turkish mills have not shown any inclination to raise bids to $410/t cif Marmara this week, which pushed the Argus daily A3 cif Marmara steel scrap assessment down $2.50/t to $410/t on Tuesday.