Turkey ferrous: Price flat, suppliers wait

The Turkish scrap import price was flat on Monday with no deep-sea offer heard on the market as suppliers' price expectations strengthened after a rise in bulk freight rates, an increase in Russian scrap export duties to a minimum €70/t, and firm domestic price expectations in US and Europe in July.

The Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment was flat at $499/t cfr.

Turkish mills started to enquire about Rostov-origin short-sea cargoes early this morning following the news that Russian ferrous scrap export duties will increase by €25/t from late July. The Argus daily A3 cif Marmara steel scrap assessment was flat today at $460/t.

Russian deep-sea scrap exporters are expected to experience difficulty this week when they attempt to push St. Petersburg dockside purchasing prices down to compensate for the increase in duties.

The three Baltic suppliers that offered at $500/t cfr Turkey for premium HMS 1/2 80:20 last week did not give any offer today, preferring to wait for another supplier to make the next deal.

Freight rates have increased more significantly from the Baltic to Turkey in recent weeks than from continental Europe and the US, with rates up more than 30pc from southern Baltic states since the middle of June.

Before the news broke on 25 June that Russia confirmed it will increase scrap export duties, suppliers were already prepared for Turkish demand to increase substantially at some point this week with August shipment trading set to kick off later than expected.

The Russian news is poorly-timed for Turkish mills that have largely not purchased much scrap over the past two weeks. Two sets of national holidays in Turkey in the second half of July means mills will either have to bombard the market with bids in the first half of the month or continue to buy through these holiday periods.

US obsolete scrap prices are expected to trade at flat to $10/t up next week for July deliveries, and obsolete prices in Europe are expected to trade at minimum sideways. This will continue to provide firm underlying scrap supply fundamentals to the Turkish market moving into July.