North America-Turkey Trade Moves Scrap Below Dec 2010 Low-point

Image A Turkish mill booked a 30,000 mt mixed cargo from a North American supplier at a composite price of $403/mt CFR Izmir late Thursday, revealing the level of the global import benchmark market. The cargo includes 12,000 mt of plate and structural, 12,000 mt of shredded scrap and 6,000 mt of HMS I. Platts daily assessment has now lost $50/mt in a month, starting June at $400/mt CFR Turkish ports for premium-graded heavy melting scrap I/II (80/20 blend): a decrease of $10/mt in a day. This is the lowest point the price series has been since records began in December 2010. The reduction month-on-month matches almost to the dollar the decrease heard in the US domestic market for June.

Warning signs about the latest drop were around since late Thursday evening, when sources heard an offer of premium-quality UK-origin HMS I/II (80/20 blend) at $400/mt CFR Turkey for HMS I/II (80/20 blend). However, at the Bureau of International Recycling conference in Rome talk of rumored offers swirled as mills and suppliers locked together in negotiations, muddying the precise picture of the market.

Mills put forward their belief that some recyclers had a lot of supply to sell in deepsea vessels before the release of annual reports, while sellers were convinced that producers had to return to the market en masse sooner or later, and once that would happen, prices would stabilize before recovering.

This scenario saw the market rebound at the end of last year from a previous November 2011 low of $410/mt CFR Turkey as mills held off persistently until stocks were extremely low. Producers in Turkey were then left with little choice but to purchase at increasingly high numbers as scrap supply scarcened during the winter months in late 2011.

The cluster of factors melding at the moment hint at a different situation now. Ramadan is around the corner -- when construction demand in MENA slows -- Turkish GDP growth is considerably weaker this year so domestic rebar buying there is down, a host of currencies (including the euro) have depreciated significantly on the US dollar. The bottom line is: stocks may be low at Turkish mills, but steel buying is negligible too.

Other offers on the market include a cargo available for July shipment from a Scandinavian recycler at $400/mt FOB for a shred-heavy cargo with some HMS I/II (70/30 blend) and (90/10 blend) as well as busheling. Two international traders offered the cargo sounded unconvinced that the Turkish market would rebound to $425/mt CFR (the figure after freight) by the time the material became available for shipping though. FIRST JUNE GERMANY SETTLEMENTS DOWN

The first contracts settled between German steelmakers and recyclers were Eur5/mt ($6.20/mt) down compared to April prices, which had shown a swing upwards of the same amount. However, another major German recycler was heard looking for material Eur20/mt below April buy-in levels for delivery in June contracts to steel producers. (
Last modified onSaturday, 06 May 2017 10:07