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Bulk ferrous scrap export prices to Turkey rise

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

NEW YORK — A fresh round of higher-priced bulk ferrous scrap export sales from the East Coast to Turkey has placed a more positive spin on near-term export tags.

Uncertainty still pervades the market on where export prices are expected to land in late January, but an increase in selling prices for three cargoes sold late Tuesday and Wednesday has brought some positivity, sources said.

A U.S. exporter sold two bulk cargoes of 45,000 tonnes each to a single consumer in Turkey late Tuesday at $391 per tonne c.i.f. for an 80/20 mix of No. 1 and No. 2 heavy melt scrap, AMM has learned.

Each cargo will reportedly carry about 30,000 tonnes of HMS 1&2 (80:20), 10,000 tonnes of shredded scrap and 5,000 tonnes of plate and structural scrap. The shredded portion sold at $396 per tonne, while plate and structural sold at $401 per tonne, sources said.

On Wednesday, a few sources reported that the same exporter had sold another bulk cargo from the East Coast to a different consumer at $393.50 per tonne for 30,000 tonnes of HMS 1&2 (80:20). The cargo will also reportedly carry 10,000 tonnes of shredded scrap sold at $5 above the heavy melt price.

Buyers for mills in Turkey have now indicated there could be a few more trades before year-end.

"(Previous trading at) $410 per tonne was too high and the market reacted. Then we saw $380s, and have now reached the $390 level. This means the market is accepting this level. Scrap is still relatively short, domestic prices are still reasonable, so at the end $390 seems (to be) the settlement level," one source in Turkey said.

"It seems that prices are increasing," one exporter said. "The main reason seems less supply these days. European scrap sellers are very quiet because (of currency) exchange rates. On the other hand, due to winter conditions, Black Sea scrap supply will be limited in the coming days."

Several other sources agreed that weather is supporting stronger prices as the market anticipates tighter scrap flows due to cold conditions.

But a scrap buyer for a second producer in Turkey suggested prices have strengthened purely due to a need to fill inventories.

Prices are rising a little, but there is "nothing supporting it," he said. "Turks didn’t buy for a while, so they had to buy. There will be more trades after Christmas."

Market conditions for Turkish long products are still negative, another source said, but they are better for flat steel products. Prices were up because U.S. exporters succeeded in taking them up, not because of improving market conditions, he said.

A fifth source said he didn’t fully agree with market speculation of a longer-term softening in tags.

"In my humble opinion, and from what we see in the U.S., a short for January delivery would be a risky position. A bulk of the cargo overhang has been cleared and it is starting to be winter," he said. "Shred feed is tight and margins for this grade are marginal at best. Despite the scrap billet spread, I see Turkey hitting $400 before we see a drop, which I would look to see mid-February or March."

Meanwhile, sources reported a few smaller-volume trades out of Romania and Russia to different Turkish mills.

One mill reportedly bought about 20,000 tonnes of bonus-grade scrap from three suppliers in the region at an average price of $402.50 per tonne, while an exporter there sold smaller vessels carrying 3,000 to 7,000 tonnes of heavy melt to three other Turkish mills in a range of $380 to $381 per tonne.

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