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US ferrous scrap export prices to Turkey rise

Keywords: Tags  ferrous scrap exports, HMS, heavy melt, scrap prices, steel scrap, Turkey, Sean Davidson

LONDON — U.S. prices for bulk ferrous scrap shipments to Turkey inched a few dollars higher this week as mills returned to the market to book supply for late December and January.

Market participants said two bulk cargo sales from the East Coast were booked over the past five days.

One cargo, comprising 40,000 tonnes of an 80/20 mix of No. 1 and No. 2 heavy melt and 5,000 tonnes of shred, was sold Nov. 28 at a composite price of $393 per tonne c.i.f. Turkey, sources said. A second cargo reportedly was sold late Dec. 2 at $392 per tonne for 25,000 tonnes of HMS 1&2 (80:20) and $397 per tonne for 30,000 tonnes of shred.

The latest price represents a $3-per-tonne increase in bulk export tags but is still a few dollars shy of U.S. offer prices, which were reported to be at $395 per tonne for HMS 1&2 (80:20).

Turkish mills have booked five additional cargoes from European exporters at similar price levels and are expected to book several more over the coming days, sources said.

Most market participants, however, are uncertain if prices will gain further traction, regardless of pending demand, as some Turkish mills weigh short-term strategies.

One Turkish trader expects at least one mill to stop production and a second to delay purchases for two weeks due to uncertainty on finished product prices.

Turkish demand for scrap is still low, according to a second trader. This week’s scrap bookings received a price boost from news that a Turkish producer had sold 25,000 tonnes of billet at $517 per tonne, he said. "That means there’s a little movement in sales by producers."

Modest gains in export prices are a reaction to higher freight costs and a stronger euro, not demand, one European exporter said. "Freights are up about $3 to $5 per tonne and the dollar-euro rate is at 1.36 again, which means a price increase of about $7 per tonne compared with last week."

The exporter said offers are limited, with not much demand. Turkey will need to buy 15 to 23 cargoes for December and January even if its mills slow down production to 50 or 60 percent of capacity, he said.

"The U.S. market is again going to be the leader in the market and is not showing weakness," the exporter said. "(However), it seems that the steel market is not good and therefore the price increases for steel scrap will not be supported by higher steel prices and will cause the market to stay very fragile."

Turkey’s domestic market for finished products is weak, a fourth market participant said. "Maybe a push will come from exports to (the United Arab Emirates). I would expect more scrap flow from the U.S. rather than continental Europe, given the exchange rates and the expectations for the European December market."

One U.S. trader expects Turkish buyers to wait a little longer before booking U.S. cargoes. "The Turks are probably waiting to see if U.S. mills try to buy sideways for December, which would be a big mistake if (Turkish mills) do come in strong on the East Coast and buy what they need before things get out of hand here," he said.

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