ST. LOUIS Tumbling U.S. bulk ferrous scrap export prices to Turkey have triggered an increase in sales to the country, with the latest sales bringing to seven the number of cargoes booked over the past week.
Market participants were quick to point out to AMM that the return of Turkish buyers to U.S. shores was merely a function of price, which has fallen more than $15 per tonne in the past 10 days.
Three exporters booked three new cargo sales to Turkey Feb. 6 and one to Egypt Feb. 4, with three of the sales originating from the East Coast and one from the Gulf Coast, sources told AMM. Thats on top of the four sales to Turkey reported last week (amm.com, Feb. 4).
One East Coast exporter reportedly sold a mixed cargo at $362 per tonne c.i.f. Turkey for an 80/20 mix of No. 1 and No. 2 heavy melt, while a second exporter sold a vessel carrying 45,000 tonnes of only HMS 1&2 (80:20) out of the Gulf Coast at $365 per tonne c.i.f. Turkey.
A third exporter reportedly sold a smaller cargo at $365 per tonne for 17,500 tonnes of HMS 1&2 (90:10) and (80:20), and 17,500 tonnes of shredded scrap.
Sources said a cargo was also sold to Egypt a few days prior to the Feb. 6 sales to Turkey at a composite average price of $370 per tonne c.i.f. Egypt for 25,000 tonnes of HMS 1&2 (80:20) and 25,000 tonnes of shredded scrap.
AMMs weekly East Coast Ferrous Scrap Export Index for HMS 1&2 (80:20) settled Feb. 10 at $335.68 per tonne f.o.b. New York, down 5.1 percent from $353.65 per tonne Feb. 3.
"U.S. prices overshot the world market in January. It brought a deluge of material to U.S. consumers and stymied any potential to retain those levels," one exporter said. "With reduced demand in Asia and Turkey, it is a simple case of supply and demand. Even the severe winter here in the U.S. wasnt enough to hold back tonnage from the market."
One European exporter said Turkish producers will now favor U.S.-origin scrap and needed U.S. export prices to fall to current levels due to weak finished product markets in Turkey.
"Turks pushed scrap prices down quite successfully since U.S. material is available and the steel market is getting weaker. It will be difficult to sell material from continental Europe," he said.
A second U.S. exporter said currency markets also contributed to plummeting export prices.
"Lack of (finished steel) sales created a downturn in the trend like a fire in the market, and the rising dollar vs. the Turkish lira exchange rate added some more fuel to this fire, pressing scrap prices to be cheaper as they are priced over the dollar," he said.
A fourth exporter said markets are likely to stabilize soon. "Turkish mills seem able to sell more rebar nowadays, and the spread between bar and scrap is normalizing, so we could see a bit more demand," he said.
A few sources in Turkey said they expect HMS 1&2 (80:20) prices to hold at around $360 per tonne in the coming days since current Turkish rebar prices in a range of $565 to $575 per tonne f.o.b. Turkey support this level.