Turkey ferrous: Price up on two deals

The Turkish scrap import price increased today on two sales from the US and Scandinavia respectively, both for June shipment.

The Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment rose $4.30/t to $431.80/t cfr on Wednesday.

A US supplier was heard to sell HMS 1/2 80:20 at $432/t and bonus at $442/t cfr Iskenderun for June shipment yesterday.

A Scandinavian supplier was heard to sell HMS 1/2 80:20 at $431-432/t cfr Samsun for June shipment yesterday.

The two deals were done prior to news this morning that China confirmed the total removal of its 13pc value-added tax rebate on exports of rebar, hot-rolled coil and billet, which stoked expectation that Turkish export rebar prices will increase further. This fuels the potential for a faster rate of increase in the Turkish scrap import price in the coming days despite healthy availability.

A Marmara mill increased its domestic rebar offer to the ex-works equivalent of its current export rebar offer at $660/t fob on actual weight basis after the news from China came out. Stockists said this indicates that the mill is not interested to sell locally, and the mill itself said it expects export rebar prices to now increase further.

The China news will have strong implications for seaborne steel price direction in a market where demand is continuing to recover strongly in regions such as south America. A Marmara mill already sold rebar to the US a few days ago at the equivalent of $655/t fob on actual weight basis. Argus' daily fob Turkey steel rebar assessment increased $2.90/t to $655/t fob today.

Turkish mills advertised two scrap deals in the middle of the day that were concluded prior to yesterday at lower prices than the US and Scandinavian sales advertised this morning, in a bid to slow down the pace of the scrap import price rise. One of the older deals was for June shipment and the other was for prompt shipment, from Kalingrad and St. Petersburg, respectively.

A total of 12 deep-sea cargoes have traded so far for June shipment, according to Argus records, with the figure expected to be close to the actual total traded so far.

Turkish mills are still expected to receive a consistent flow of deep-sea scrap offers over the coming days but several exporters which have recently tended to sell towards the bottom price of the market have already sold off a lot of their June shipment allocation through sales in the past two weeks.

Another US supplier offered to Turkey in the past few days. It was always expected that the US would sell in a $430-435/t cfr Turkey range but the timing of this latest US deal is earlier than expected - a week before US domestic mill negotiations for May deliveries. Turkish mills still expect they can attract several US cargoes at or below $435/t cfr for June shipment but a lot will depend on how continental European exporters handle their June shipment availability and offers before both US and European domestic scrap negotiations for May delivery take place next week and the week after.

At least six Baltic cargoes and three St. Petersburg cargoes still need to be sold for June shipment.

In the short-sea Turkish imported scrap market, Romanian HMS 1/2 80:20 exporters would only accept $410/t cif Marmara today.

The Argus daily A3 cif Marmara steel scrap assessment increased $2.50/t to $410/t.