Turkey ferrous: Price down strongly on sales appetite

The Turkish scrap import price decreased significantly today as deep-sea scrap suppliers dropped offers in order to guarantee sales amid high availability.

The Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment decreased $6.50/t to $467.50/t cfr on Thursday.

Continental European exporters have this week managed to buy HMS 1/2 at €340/t delivered to dock and have now dropped bids to €335/t. With exporters' average stock price levels edging towards €345/t delivered for August loading, they have already offered $465/t cfr Turkey for HMS 1/2 80:20, although without success.

European exporters' ability to offer lower may be curbed by a strengthening of the euro against the dollar over the past week from €1: $1.177 on 22 July to €1.189 today.

The $465/t offers emerged after a US cargo was sold to a Marmara mill yesterday for August shipment with HMS 1/2 80:20 priced at $471/t cfr, and shred and bonus priced at $486/t cfr. Over 70pc of the deep-sea cargoes sold since the last week of June to Turkey have been of US-origin, with supply levels dominating exporters' decisions.

The US seller yesterday has been able to purchase #1 HMS from one of its domestic regions on the east coast at $375-380/gt delivered to dock for several days now, which means it retains a healthy margin for August shipment sale, particularly having already sold two cargoes to Turkey for end July and August shipment at $496/t and $485/t cfr for HMS 1/2 80:20, respectively.

Market participants now question whether US exporters will sell their September shipment cargoes around the time US domestic delivered mill negotiations for August deliveries settle at expected lower prices next week.

In addition to high US supply, European and UK exporters have also been pressured by strong deep-sea availability to Turkey from Venezuela and large volumes of short-sea scrap offered from multiple geographies.

High freight rates have also curbed UK and European exporters' ability to sell bulk cargoes further afield to alternative markets, Egypt excepted. UK exporters are under less pressure relative to European competitors as the bulk of UK availability for first half August shipment is estimated to have been sold off.

Short-sea availability may start to tighten on suggestions yesterday that a proposed Ukrainian scrap export ban may be officially implemented this coming Friday. If Turkish mills have purchased volumes equating to several deep-sea cargoes from Ukraine as claimed in the past month, and if cancellations become apparent, this could alter the rate of deep-sea demand next week.

Beijing's announcement that cold-rolled coil steel exports have had their tax rebate removed today suggests that there will be no announcement on taxes on other steel products by 1 August. Around 10 days ago, market discussion had already started to circulate that any taxes on Chinese steel exports would come on 1 September.

The Argus daily A3 cif Marmara steel scrap assessment was flat at $440/t today with several mills showing indications they would pay around this level for Bulgarian HMS 1/2 80:20.