Turkey ferrous: Price flat: Correction

Corrects daily fob Turkey rebar assessment movement to $5/t from $7.50/t

The Turkish scrap import price was flat today as US and European domestic demand indicated there is little possibility for scrap prices to fall sharply through the middle of June to the extent that rebar prices have since the end of May.

The Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment was unchanged at $501/t cfr.

Turkish mills indicated target prices of around $490/t cfr Turkey for premium HMS 1/2 80:20, but there was no interest from the supply side to move offers close to this level at the start of the week.

US east coast #1 HMS dockside purchasing prices increased by around $30/gt during the start of domestic purchasing last week to around $420-425/gt, and there is no sign that prices will come under pressure any time soon. US exporters have pre-existing sales to commit to slightly above $500/t cfr Turkey, and additional cargoes sold at similar prices elsewhere. US shredded domestic delivered mill prices now average $490-500/gt delivered to dock after last week's increase. Both sets of prices indicate a nearby floor to Turkish import pricing.

The strength of European domestic scrap demand has also curbed that region's exporters from entertaining lower Turkish price expectations for now. Domestic mill HMS 1/2 80:20 buying prices in Germany could reach an average of €370/t ($449.90/t) delivered when June negotiations settle on current expectations, and regional scrap exporters in the Netherlands found it difficult to secure HMS 1/2 below €360/t ($437.80/t) delivered dock today. The continental European domestic June delivery prices should secure a nearby floor for dockside prices through the middle of June.

Turkish mills stated that their scrap-rebar margins have now been narrowed, after rebar demand weakened following the peak period of global construction activity in the first half of May and scrap demand stayed strong in the US and Europe at the start of June.

Three Turkish mills today offered $725-730/t fob for targeted export rebar sales for August shipment, but mills are largely ready to accept lower levels. Argus' daily fob Turkey steel rebar assessment decreased by $5/t to $720/t today. The assessment has fallen by $52/t since 24 May, during which time Argus' cfr Turkey scrap assessment has fallen by $16.60/t from its peak. Mills were able to achieve scrap-export rebar spreads up to $250/t in May.

Turkish mills were resigned to offering around $690-695/t ex-works excluding value-added tax (VAT) in the domestic rebar market today, and it is not clear at what price levels demand will rise, stockists said.

Some mills were forced to sell small volumes at prices significantly below $700/t ex-works in response to government calls last week, and it is not clear whether prices will move up in the short-term following those sales. Both stockists and mills are confused about the situation, and the volatility of the lira-dollar exchange rate is further dampening trading activity.

On no change in bid-offer indications, the Argus daily A3 cif Marmara steel scrap assessment was flat at $470/t.