NEW YORK East Coast bulk ferrous scrap exports remain at a standstill as a weak finished product market in Turkey keeps the countrys largest offshore scrap consumer at bay.
Turkish mill buyers failed to return to the docks once the U.S. domestic market settled, as had been anticipated, with market participants describing the past few weeks as "dead," "quiet" or "boring."
A source in Turkey said some mills had picked up small cargoes from neighboring shores, but a majority of the mills remained inactive in scrap markets. "Everybody wants a brave heart to come and buy a U.S. deep-sea cargo to determine the market level," he said. "It is still so quiet. Turkish mills are buying billets and local scrap in order to postpone the deep-sea purchases."
It has been more than three weeks since the United States last exported a cargo to Turkey at around $400 per tonne for an 80/20 mix of No. 1 and No. 2 heavy melt, and sources expect prices could come off in the next wave of trading.
It seems like Turkish buyers "have gone to sleep," one U.S. exporter said. "My agent tells me the inventories at most of the steel mills are very low and they will need to jump into the market shortly. I am shocked nothing happened over the past weekend. I figure they will come in all at once and buy seven to 10 cargoes minimum. My guess is the heavy melt price will be $390 to $395 for 80/20."
However, a second exporter said Turkeys absence isnt unusual. "It isnt odd at all. Whats happening is youve got trouble selling finished product. The reality is, if they needed the material theyd buy it. I think it depends on how fast sellers break, because now (Turkish mills) are offering rebar at $595 per tonne."
A third exporter agreed, saying Turkish mills only look at the sales side. "Scrap is not what they are looking for or interested in. I guess they expect further decreases. Therefore, there is no activity at all and is so ... boring. I even heard rebar quotes at $590 today," he said April 8.
A second source in Turkey said mills were struggling to sell deformed rebar even at less than $600 per tonne and hot-rolled coil apparently at the same level. "No sale of final product; no big demand for scrap. (hot-rolled coil) producers are buying slab from Europe. This makes demand for scrap less. Also, summer is coming and difficulties for scrap procurement will ease due to winter conditions being over," he said.
The absence of any bulk sale left AMMs East Coast Ferrous Scrap Export Index for HMS 1&2 (80:20) unchanged April 8 at $375.58 per tonne f.o.b. New York for a third consecutive week.
On the West Coast, one exporter reportedly sold two bulk cargoes this past week to consumers in Asia. A cargo to a mill in South Korea reportedly traded at $407.50 per tonne for HMS 1&2 (80:20), while the second cargo of the same product went to Malaysia at $413 per tonne, several sources said.
Bulk freight rates have eased a little over the past week, which offered exporters a better shipping value for scrap, one market participant said.
AMMs West Coast Ferrous Scrap Export Index for HMS 1&2 (80:20) settled April 8 at $374.83 per tonne f.o.b. Los Angeles, up 0.6 percent from $372.63 per tonne a week earlier.