NEW YORK A strike at a steel mill in Egypt has benefited at least one North American scrap exporter after a vessel carrying 50,000 tonnes of ferrous scrap was diverted to a mill in Turkey for a higher price.
In a deal booked Aug. 20, the cargo carrying 33,000 tonnes of shred, 13,500 tonnes of No. 1 heavy melt, 1,500 tonnes of plate and structural and 1,000 tonnes of cast iron scrap was sold for an average price of $385 per tonne c.f.r. Turkey, according to market participants.
The vessel was just three to four days away from arriving at Adabiya port in Egypt before the North American exporter was informed of the buyers inability to accept the vessel, according to a source.
However, with demand still strong from mills in nearby Turkey, the exporter was able to conclude a sale at prices significantly higher than the prices fixed for the sale to Egypt, he added.
"For metal thats already on the water, this market worked in his favor. He got a better rate from Turkey and is probably smiling all the way to the bank," the source said.
While some sources believe the vessel was diverted from Egypt due to political turmoil in the region, a source familiar with the sale said a strike at the mill the cargo was headed to caused the seller to offer to swap cargoes.
"There was no point in the Egyptian mill paying demurrage so a swap was offered. This cargo was sold to Turkey while the seller will deliver the Egyptian cargo later when the strike is over," he said.
A third source, based in Turkey, was among those who felt the vessel was diverted due to the unrest in Egypt.
"(It was) resold and directed to (a Turkish mill). The vessel is expected to arrive (in Turkey) within a week," he said.
In addition to the last-minute sale, market participants said a bulk cargo sale from Scandinavia and another from the United Kingdom concluded Aug. 20 at prices relatively unchanged from the prior weeks sales.
The Scandinavian cargo reportedly sold at $382 per tonne for 25,000 tonnes of A3 scrap and $384 per tonne for 16,000 tonnes of shred. A 20,000-tonne cargo from the United Kingdom was sold at $370 per tonne for an 80/20 mix of No. 1 and No. 2 heavy melt, although some sources suggested the mix was closer to 75:25 or 70:30 HMS 1&2.
Turkish mills have booked slightly more than 70 bulk cargoes since the start of July and demand could likely wane in the coming days, according to other sources.
"Since the beginning of July it has been more than 70 cargoes booked by Turkish mills. Part of this was to cover short positions and the rest to balance their stock levels. Now it looks like their appetite for scrap is lesser," one scrap trader said. "They are not able to get their desired price levels for finished products as well and the export sales demand is low. On the other hand, scrap suppliers also do not have much scrap available; therefore, we may see stabilization in scrap prices with less demand from Turkish mills for a while."
The last bulk sale out of the United States was concluded Aug. 16 at a price basis of $378.50 per tonne for HMS 1&2 (80:20), according to several sources, indicating prices have held within a $5 range since the last week of July.