Turkey ferrous: Price flat, China less volatile

The Turkish scrap import price was flat today as both buyers and sellers became more confident that the Chinese steel market may stabilise in the coming days after dropping sharply at the end of last week.

The Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment was flat at $503/t cfr.

Chinese domestic steel prices broadly fell today and there is the possibility for further decreases during the second half of the week, according to market participants. But as long as there is no significant price cut in Chinese domestic/export prices on the scale that occurred at the end of last week, the spread between Turkish and Chinese export prices means there is still the option for Turkish mills to increase scrap import prices further, particularly when considering that their scrap-export rebar margins are currently more than $250/t.

Turkish mills did not find much appetite to sell scrap from exporters today, which maintained upward pressure on the import price. But mills are not likely to increase their rebar offers further if China is now at its ceiling in terms of rebar prices, despite how much cheaper their material is. Turkish steelmakers will likely want to preserve their $250/t scrap-export rebar spread for as long as possible, which means they will likely exercise more caution with bids for scrap than earlier in May.

Domestic rebar demand in Turkey was weak today and stockists queried whether Turkish mills can increase rebar offers further after the change in Chinese direction, even though they have the spreads in place to do so. Stockists also questioned whether seaborne markets can accept higher rebar prices for August shipment.

A Marmara mill increased its domestic rebar offer from $740/t to $750/t ex-works in Biga this morning. The mill has made export sales in the past week above $760/t fob Turkey. An Izmir mill was heard to purchase 35,000t of billet at $735/t ex-works yesterday.

In the short-sea Turkish scrap import market, two Izmir mills were heard to purchase Adriatic and Romanian HMS 1/2 80:20 at $480/t cif Izmir on 13 May before China's sharp price cut but these are the minimum levels being sought by various short-sea suppliers today.

The Argus daily A3 cif Marmara steel scrap assessment increased $5/t to $480/t.