NEW YORK U.S. ferrous
scrap export prices to Turkey could be under pressure after a
fresh bulk sale this week indicated some softening, according
to market participants.
Several Turkish and U.S. sources
said they have begun to question the overwhelming bullish
sentiment that overtook the market following Hurricane Sandy
after two U.S. bulk deals to Turkey were concluded in the past
five days at levels slightly below where they had
A cargo of about 25,000 tonnes
of an 80/20 mix of No. 1 and No. 2 heavy melt, shred, and plate
and structural scrap sold off the East Coast to a Turkish mill
at $410, $415 and $420 per tonne c.f.r., respectively,
according to market sources. A few traders, however, said they
had sufficient reason to believe the actual traded price was
about $1 or $2 per tonne lower.
The sale, concluded off a
tender, follows one concluded late last week at identical price
levels. However, the cargo size on last Fridays sale was
greater than 40,000 tonnes and will therefore attract
significantly lower freight, sources said.
Some sources said their previous
bullish sentiment on export sales to Turkey is now being
"(There) seem to be a lot of
prompt cargoes not getting sold. I spoke to a handful of
suppliers who claimed if they could get short for December
shipment, they would gladly take a sale at todays
levels," one source said.
This opinion is a notable
divergence from the market talk over the previous few weeks
that flows into export yards were tight. The earlier
speculation that some exporters were struggling to secure scrap
to fill bulk orders helped drive the recent bullish sentiment,
Asked if the availability of
prompt cargoes implies that some exporters could be sitting on
healthy levels of scrap, the source said, "This is my point and
basis for feeling a bit more bearish than earlier. ... Several
cargoes looking for a home without success is a sign that the
Turks may in fact be successful in resisting higher levels and
could put a damper on recent price rises. Im not throwing
in the towel just yet, but (I) am concerned."
The source said that he still
believes the market will stay strong until the first quarter of
next year, but he admitted he is "not nearly as confident as
A second source said the smaller
cargo size of this weeks bulk sale was not a true
indicator of the current price environment, suggesting that the
next U.S. deal on more than 40,000 tonnes would be a fairer
bellwether of the next round of export trades to Turkey.
A third source suggested that
Turkish mills have focused their attention on Europe.
"They are trying to secure
tonnage out of the European market. Germanys pricing is
rising since the increase in demand," he said.
Exporters are likely to continue enjoying current depressed
levels on freight rates through November, a fourth source