Turkey ferrous: Price flat on two deals

The Turkish scrap import price was flat on Thursday on the assessment of two deep-sea cargoes traded yesterday.

The Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment was unchanged at $426.80/t cfr.

A Russian supplier sold HMS 1/2 80:20 at $426/t and bonus at $436/t cfr Iskenderun for first half June shipment.

A Venezuelan supplier sold 25,000t of HMS 1/2 80:20 at $424.50/t cfr Iskenderun for June shipment.

Baltic and Russian suppliers today offered around $430-432/t cfr Turkey for premium HMS 1/2 80:20, targeting sales in the high $420s/t. A US offer at $433/t cfr reflected sustained sales appetite across exporting regions.

A Baltic supplier was heard to sell HMS 1/2 80:20 at $418/t cfr Turkey on 19 April and after another Baltic supplier sold top-up material at $422/t cfr on 16 April some of this region's suppliers appear to have the ability to sell in the $420s/t.

Several scrap exporters continue to take short positions in a largely bullish market by selling deep-sea cargoes on a lengthy sales lead time, in this case for June shipment. They have very little material collected for loading in six-seven weeks' time, which is likely to support dock prices in these exporters' region, and potentially push some of them to blend in lower quality HMS material.

Narrower purchasing lead times from destinations such as Egypt may see some of these suppliers adopt a different sales strategy at some point in Q2 2021, and slowly take their sales appetite away from Turkey. For example, a UK supplier that sold to Turkey at the bottom price of the market for May shipment earlier this month decided to sell to Egypt last week at a higher equivalent price for a relatively similar shipment period.

But many suppliers will continue to largely focus on Turkey with a high-volume sales strategy at these historically high price levels, which will ensure deep-sea scrap flows to Turkey remain strong.

Continental European exporters are targeting HMS 1/2 80:20 deals at a minimum of $425/t cfr Turkey, with the strong euro curbing their sales appetite. Several continental European exporters, particularly those that sold around the premium HMS-equivalent $420/t cfr Turkey mark last week, will now wait until the second week of May to enter domestic negotiations with local mills.

Turkish steelmakers are recorded to have bought 35 deep-sea cargoes for May shipment, with the estimated total purchased around 44-45 cargoes. Supply and demand have balanced since the wash out of availability last week to Turkey and Egypt – around 20 cargoes were traded – but Turkish mills are already well under way with June shipment buying. A total of eight cargoes have already been purchased in the past week for latest 10 June shipment or first half June shipment.

A large Marmara mill has not purchased any June shipment material, although it is expected to be able to postpone one of its May shipment deals to June shipment.

Turkey's domestic rebar market has found some demand in the past few days to complement the extremely strong export rebar demand. Large tonnage deals have been heard in Marmara, Izmir and Iskenderun since 20 April and today Marmara mills would only accept firm bids at around $625/t ex-works. An Iskenderun mill also bought large quantities of billet from two other regional steelmakers at $592-595/t ex-works mid-week.

Export rebar demand remained strong today. Several European requests for Turkish product were heard today for June shipment, although availability for this period is likely limited as Turkish mills are already selling July shipment rebar in large volume.

There are still prospects for even higher fob Turkey rebar deals to southeast Asia given that Chinese offers are over $100/t above Turkish prices. This spread was the driver for record-high fob Turkey rebar deals earlier this week.

In the short-sea Turkish imported scrap market, Bulgarian suppliers sought prices of $405/t cif Marmara or higher for their HMS 1/2 80:20 today, up sharply from Romanian sales concluded in a $385-387/t cif Turkey range on 19 January.

The Argus daily A3 cif Marmara steel scrap assessment increased $1.50/t to $402.50/t.