Turkey ferrous: Price down, HMS offers weigh

The Turkish scrap import price edged down today on continued pressure from strong availability of HMS grade material.

The Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment decreased $1/t to $474/t.

Continental European, Venezuelan and Baltic offers with large quantities of HMS material were available on the market today. Two continental European exporters were still looking for cargo sales today and Turkish mills largely continued to stay out of the market based on the availability they see from deep-sea suppliers for August shipment, as well as from short-sea suppliers. Several mills said they bought large amounts of short-sea cargoes in the past two weeks.

US east coast availability for August shipment has been particularly healthy and has led the Turkish scrap import price fall, with very few alternative markets seeking HMS in July. A lot of that August shipment material from the US has now been traded but US exporters may sell their September shipment cargoes early in August given that Turkish import prices at current levels will likely look more attractive than selling domestically at the same time.

Turkish mills still need at least 10 deep-sea cargoes for August shipment but hidden business is a worry for all exporters that still have August shipment cargoes in hand, particularly those holding large volumes of HMS material.

Russian metals producer MMK was looking to buy its first deep-sea scrap cargo for its Iskenderun steel mill today after announcing earlier this month that it has restarted operations at the mill's melt shop that was idled in 2012. It has already bought short-sea cargoes as trial shipments but this will be its first deep-sea purchase. For the majority of deep-sea purchases going forward, the steelmaker will likely buy low copper content material from the Baltic for its flats steel production, but it was also heard to receive three offers from continental Europe and Scandinavia today.

Premium HMS 1/2 80:20 equivalent prices below $475/t cfr Turkey are calculated workable for continental European exporters as some of these suppliers are now expected to be able to collect at an average stock price level close to €350/t delivered to dock for August-loading cargoes.

Market participants said there is a risk to any deep-sea cargo sale now given the mounting discussions in China that an export steel tax is imminent, which could push the entire ferrous complex upward at short notice.

In the Turkish short-sea imported scrap market, the Argus daily A3 cif Marmara steel scrap assessment decreased $5/t to $440/t on lower bid-offer indications.