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Turkish scrap buy may push prices down

Keywords: Tags  ferrous scrap, bulk scrap, Turkey, export prices, Sean Davidson

ORLANDO, Fla. — East Coast bulk ferrous scrap export prices shed more than $10 per tonne April 10 after a single sale to Turkey broke a nearly monthlong deadlock between U.S. exporters and Turkish buyers.

According to several market participants, a Turkish mill booked a mixed cargo of about 20,000 tonnes of an 80/20 mix of No. 1 and No. 2 heavy melt, 20,000 tonnes of shredded scrap and 5,000 tonnes of plate and structural scrap from a U.S. exporter that had been absent from the market for more than two months.

The cargo sold for a composite price of $390 per tonne c.i.f. Samsun, Turkey, putting the HMS 1&2 (80:20) value at anywhere between $387 and $389 per tonne, most sources said, indicating a drop of at least $11 per tonne from the last U.S. sale to Turkey almost a month ago.

One exporter based in Europe said the price raised some eyebrows. "Everybody here is surprised about this low level, especially because (freight to) Samsun is more expensive than anything else," he said.

The exporter said buyers in Turkey had sent out offers of $370 per tonne for HMS 1&2 (70:30) to European exporters, but Wednesday’s sale will likely push offers downward. "They will go for lower numbers as the steel market remains lousy," he said. "The question is: How much scrap is in the U.S.? Is there any pressure to sell?"

A buyer for one Turkish mill said it was unclear if the sale would trigger a much-awaited round of scrap buying by Turkey. "At the moment, demand is weak because mills are not selling finished product. Turkish mills have started to decrease production capacity and can stop buying scrap. That’s why the prices are falling," he said. "Only some mills that need scrap are buying."

The buyer said that part of the reluctance to participate early in this environment is that mill buyers feel that the longer they wait, the cheaper scrap will be. "Whoever buys scrap today, tomorrow the other mill will buy cheaper, so mills are hesitant to buy," he said.

A buyer for a second Turkish mill said he expects consumers to push for a $385-per-tonne price for HMS 1&2 (80:20), based on the higher freight costs included in the April 10 booking. "Considering freight from the U.S. to the Black Sea, producers will push for lower prices, such as $385 (per tonne) for HMS 80/20. This could become the new price level," he said.

A buyer for a third mill in Turkey said it was still too early to comment on where prices for the next round of trading will settle.

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