Turkey ferrous: Price up as outlook strengthens

The Turkish scrap import price increased further on Thursday on four deals concluded yesterday followed by strong demand today as the steel market outlook strengthened.

The Argus daily assessment for HMS 1/2 80:20 cfr Turkey increased 90¢/t to $450.90/t.

A US supplier sold HMS 1/2 80:20 at $454/t, shred at $464/t and bonus at $464/t cfr Iskenderun for March shipment yesterday.

A second US supplier sold HMS 1/2 80:20 at $451/t, shred at $461/t and P&S at $461/t cfr Iskenderun for March shipment yesterday.

A total of 12 US sales to Turkey have been recorded for March shipment as some US exporters have taken advantage of the margins on offer. The US domestic market is also poised to strengthen as a US steel mill bid for March delivery obsolete grades at $50/gt up from February prices.

A continental European supplier sold 15,000t of HMS 1/2 75:25, 10,000t of shred, 5,000t of busheling and 10,000t of P&S at an average price of $453/t cfr Iskenderun for April shipment yesterday.

A Baltic supplier was heard to sell HMS 1/2 80:20 at $449/t cfr Iskenderun for April shipment yesterday.

Continental European scrap was heard close to being traded in a $446-448/t cfr Turkey range today for April shipment, but offers were limited as suppliers held back material in anticipation of a potential market uptrend over the next month.

A flat steel producer bought at least three deep-sea cargoes yesterday, paving the way for another steelmaker that produces flats to enter the market today, for European scrap.

The second steelmaker has not been heard to buy deep-sea scrap for many weeks but its sustained domestic steel sales in February boosted its scrap requirement and the mill may now delay maintenance scheduled in April and May, market participants said. A third flats producer also has maintenance planned for May, in the final 15 days of the month.

The second steelmaker was heard to sell 20,000t of rebar locally today at around $637/t ex-works, after yesterday selling 40,000t to domestic buyers. It also sold 10,000t to Jamaica yesterday at around $635-640/t fob on actual weight basis.

Other mills sold to Yemen and Israel yesterday at an equivalent base price of $635-640/t fob. Turkey's domestic demand was very strong today, and mills closed sales by midday.

The strengthening market outlook is largely based on the perception that global steel demand could be greater than it was during the December surge, which could result in higher scrap and steel prices. Domestic rebar prices peaked at $660-665/t ex-works at that time, and large volumes of Turkish rebar were not able to be sold at $640-645/t fob when the market peaked.

This indicates there is room for the Turkish domestic market to move up from current levels as offers were no higher than $650-655/t ex-works today, and the lira is it a much more appreciated level against the US dollar compared to December, allowing for lower lira-denominated prices.

On the steel export side, the demand this week at $635-640/t fob was not seen in such high volume in December, indicating that export rebar demand may already be stronger than it was when prices were at previous multi-year highs. At that time, Chinese rebar prices were also far lower than they are today, which means Turkish mills have many more export sales opportunities in the current market situation.

There is also clearly less hesitancy to buy deep-sea scrap at $450/t cfr Turkey today than there was when the market hit $450/t cfr Turkey in December.

The market continues to be dominated by increasing freight rates and scrap exporters are unsure when this upsurge will stop. A Baltic exporter was quoted $54/t today to Turkey for prompt shipment, having been offered $48/t at the end of last week. Freight rates have doubled for Baltic exporters in a matter of two weeks.

Short-sea import trading activity was quiet today but $425-430/t cif Marmara bid indications arose yesterday. The Argus daily A3 cif Marmara steel scrap assessment was flat at $430/t. Argus' Russia-Ukraine A3 fob Black Sea assessment increased $2/t to $405.50/t on a $2/t drop in coaster freight rates to $36/t on the Rostov-Marmara route.