NEW YORK U.S. ferrous scrap export prices for bulk shipments to Turkey logged big gains over the past few days as mills returned to replenish inventories.
At least four bulk cargo sales out of East and Gulf coast ports were reported by different market participants in a range of $400 to $405 per tonne c.i.f. Turkey for an 80/20 mix of No. 1 and No. 2 heavy melt.
The sales were booked over the past few days, with a single exporter accounting for three of the four mixed cargoes sold, sources said. Transacted prices represent an increase of about $10 per tonne from the previous round of U.S. sales to Turkey during the first week of February (amm.com, Feb. 7).
One Turkish source said a fifth sale had occurred Wednesday at $401 per tonne c.i.f. Turkey for HMS 1&2 (80:20) from the East Coast, but other sources didnt confirm the deal.
This weeks $10-a-tonne jump in export prices appears to have been partially driven by stronger domestic market sentiment, sources said.
The pricing rise may also have been triggered by fresh orders for finished products in Turkey and shifting currency markets, another source in Turkey said.
"I guess a reason behind this increase is new business. Some mills in Turkey always work with less booking quantity, and when new sales are made by mills, they book additional quantity. So demand comes suddenly when booked mills take a position," he said, adding that the increase could also be tied to changes in the euro vs. the U.S. dollar.
However, few market players were willing to predict whether prices will hold at this level or possibly move again in either direction, citing some mixed signals.
"These prices represent a $10 increase in prices. For the moment, there is resistance from mills to pay higher levels than these recent bookings," one U.S. exporter said.
"The last sale we heard today was a U.S. sale at $401 per tonne for HMS1&2 (80:20)," the first source in Turkey said. "People have stopped buying and the rebar market is not good. (One broker) is still knocking on doors to sell a cargo they bought from a U.S. East Coast exporter last week. We hear rumors that the U.S. local market is expecting to see January (scrap price) levels in March, which means over $410 for Turkey. But there is no Turkish buyer ready to accept these levels. Some are expecting a decrease."
A second U.S. source, however, speculated that there could be further strengthening.
"It looks like scrap prices are heading back to January levels for both export and domestic. One theme continues to dictate the scrap market: lack of supply. Expect a brisk buying event for domestic mills early next week," he said.