Turkey ferrous: Price down as rebar prices surge

The Turkish scrap import fell today on a second Canadian sale in the space of two days after mills began to receive several offers at $510/t cfr for premium HMS 1/2 80:20 at the same time as rebar prices continued to move up sharply.

The Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment decreased $7.70/t to $502/t on Friday.

A Canadian supplier sold 17,500t of HMS 1/2 95:5 at $507/t and 17,500t of shred at $522/t cfr Iskenderun for July shipment.

The Canadian supplier was heard to have a third cargo available to sell to Turkey for July shipment. The same exporter sold four cargoes to Turkey in quick succession in the first and second week of April for May shipment.

More deep-sea deals were heard concluded today including from the US east coast.

Turkish mills bid $500/t cfr Turkey for premium HMS 1/2 80:20 having received several offers at $510-512/t cfr including three from north America. Mills tend to bid lower when they start receiving multiple offers from the US and Baltic.

The strong price indications mills are receiving for higher-grade material may also be pushing them to bid lower for HMS and be more resistant on negotiations for that grade. Mills have now clearly indicated to several exporters they are satisfied to pay $20/t for shred above HMS 1/2 80:20 levels.

The evident availability of scrap from the US and Canada has seen Turkish mills increase their scrap-rebar margins significantly after a dramatic increase in Turkish domestic rebar demand this week.

A Marmara mill sold around 4,000t at the equivalent of $735/t ex-works excluding VAT this morning, around $45/t up from the region's average sales price seven days ago, and $10-15/t up from another Marmara mill's sales for small tonnages yesterday.

Stockists were convinced that large volumes would have traded in Marmara this afternoon had the lira not weakened strongly against the US dollar during the day. Offers in the region stood at $740-745/t ex-works today. Mills were on the verge of scrap-domestic rebar spreads of around $190/t last week but that has quickly turned around to around $225-230/t based on today's scrap and rebar prices, on a par with the peak levels mills were achieving a month ago.

Overseas rebar demand from several of Turkey's customer bases has risen in the past week too. An increase in Chinese domestic steel prices this week means southeast Asian buyers are now under pressure to increase import bids in the face of Turkish offers that have moved to around $750-760/t fob. One Turkish mill was heard to reject a bid from Hong Kong.

Argus' daily fob Turkey steel rebar assessment increased $12.50/t today to $737.50/t fob.

The introduction of several deep-sea scrap offers from the US and Baltic influenced Turkish mills towards expecting that they can still achieve more attractive HMS prices, around $500/t cfr Turkey for premium HMS 1/2 80:20. But continental European availability has still not appeared and there is no sign that offers will flood the export markets in the second half of June.

Mills expect that some continental European exporters will have cargoes without the higher-grade material such as P&S, shred and busheling, and that they can attract those sellers to prices around $495/t cfr for their HMS 1/2 80:20. Significantly higher delivered mill prices in continental Europe relative to dockside purchasing prices has influenced Netherlands HMS 1/2 80:20 prices to rise to a very minimum of €370/t delivered to dock but exporters are also in a position to be able to increase bids to these levels based on suitable margins available at current Turkish price levels.

In the short-sea Turkish imported scrap market, the Argus daily A3 cif Marmara steel scrap assessment was flat at $480/t.