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Bulk scrap sale to Turkey clarifies little

Keywords: Tags  ferrous scrap, scrap exports, heavy melt, HMS 1&2 (80:20), scrap prices, Sean Davidson

NEW YORK — A fresh U.S. bulk ferrous scrap sale to Turkey has left the market uncertain about future pricing trends as the sale was concluded at the same level as last week.

Trading has been relatively quiet thus far this week, with only one other bulk sale—originating in Europe—concluding on Wednesday, market participants said.

A U.S. exporter sold 31,000 tonnes of an 80/20 mix of No. 1 and No. 2 heavy melt to Turkey on Tuesday at $393 per tonne c.i.f., sources said. The cargo is expected to carry an additional 2,000 tonnes of shredded scrap sold at $5 higher than the heavy melt price, AMM has been told. The heavy melt price was unchanged from last week’s bulk sale out of the Gulf Coast (, Dec. 14).

The mixed cargo sale out of Europe on Wednesday indicated that the European exporter negotiated a price higher than current U.S. levels. The exporter sold some 16,000 to 17,000 tonnes of shredded scrap, 6,000 to 7,000 tonnes of HMS 1&2 (90:10), 1,000 tonnes of bonus-grade scrap, 1,000 tonnes of No. 1 busheling and 2,500 tonnes of HMS 1&2 (70:30) at an average price of $395 per tonne c.i.f. Turkey. Market estimates indicate an HMS 1&2 (80:20) price of roughly $390 per tonne for this European cargo.

Sources are divided on the influence these sales might have on subsequent deals.

"There is a little movement in the Turkish market, but in my opinion it is for some deals which will be concluded before Christmas in Europe and the (United States)," one European exporter said. "For the Balkan market, we see mill bids decreasing $20. This could mean two things: Either (Turkish mills) do not want material from the Balkans ... or this will be the pattern for everyone in the market. My modest opinion is that now the mills are almost overstocked."

Several Turkish ports are unloading numerous vessels, with more either anchored or en route, the source added.

"I’m hearing a lot of chatter that Turkey is going to come out pretty weak, price-wise, to start the year. I think the feeling out of the (United Kingdom) is that if China’s billet prices continued to rise, then Turkey would have to raise (prices) as well. ... (I) guess that is not going to happen just yet," one U.S. exporter said.

Another U.S. exporter said that it is "plausible" that the market will receive lower bids from Turkey in January. "They are having a difficulty selling product at the price they need. The issue right now is (that) margins are being compressed everywhere," he said.

A fourth source speculated that prices could increase in the coming weeks, albeit for a short time period. "I am expecting a revival very early (in) January, with possible reversal by (late) January. There is not much overhang (and) collections are not very good, but demand for products stinks and weather seems milder than expected," a third source said.

"I also heard (that two European mills) paid as much as €328, or $426, for shred delivered (to the) plant. I believe this might sustain the E.U. market for a good part of January and might push Turkey up," he added.

The source said that offers from the United States have also firmed. "I see nothing at less than $375 per tonne f.o.b. just to start talks. I think we won’t see sales before January now," he said.

U.S. East Coast prices for HMS 1&2 (80:20) are above $390 per tonne this week, a fifth source said, with U.S. offers reported at $395 per tonne Wednesday.

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