NEW YORK U.S.
bulk ferrous scrap export prices to Turkey slipped this week as
market participants continue to debate whether prices are
nearing a floor.
Two Turkish mills
reportedly booked cargoes from a U.S. supplier at around $358
per tonne for an 80/20 mix of No. 1 and No. 2 heavy melt, down
1.1 percent from $362 a week ago (
amm.com, Feb. 10).
In addition, a third
Turkish mill booked two 25,000-tonne cargoes out of the United
Kingdom at $351 per tonne for HMS 1&2 (80:20), sources
said. British heavy melt typically sells at a discount to U.S.
Export prices to
Turkey have dropped by around $40 per tonne since the start of
this year, and buyers and sellers offered mixed views on
whether this slide will continue or level off in the coming
participants said the current bearish sentimentdriven by
an apparent oversupply of U.S. scrapcould lower prices to
around $350 per tonne and then hold as Turkish mills look to
keep rebar prices at or near $550 to $560 per tonne f.o.b.
"I guess we are
reaching the bottom," one Turkish mill buyer said. "Turks are
running with very low inventory. On the other hand, I am not
expecting a bounce back since price and demand for products is
running very slow. Therefore, there is no change in terms of
margins for steel producers."
A second buyer agreed,
saying that while it is tough to predict price direction, the
situation appears to be "near to the bottom" for scrap. Current
rebar prices are around $560 to $570 per tonne, he said.
"It seems that rebar
prices may soften to $550 (per tonne) and scrap may go down to
$345 (per tonne) in the short term," a third buyer said. "I
believe that these levels might be the bottom for scrap and we
can see a stable market for a while."
A few Turkish traders
were more bearish, however, saying they expect Turkish mills to
take advantage of the current scrap supply to try to drive
prices down further.
"With multiple cargoes
around, Turks will not hesitate to try to reduce the scrap
price and maximize their profit margin," one trader said.
One European seller
said that some of the bearish sentiment stems from his outlook
for finished steel product sales out of Turkey. "The market
does not look good for finished products. There is pressure
from Ukraine to sell at lower numbers, which are approximately
$10 (per tonne) lower than Turkish material. It will also
depend on the availability of scrap at U.S. East Coast
terminals and on the scrap market in the U.S. in March."
"Turkish mills are
seeing a number of traditional volume markets being closed or
semiclosed due to trade restrictions, competition from Chinese
product or local competition," a source out of Europe said. "To
accommodate the same volumes they need to do so at lower
prices, so they are pushing for cheaper raw material. I do not
see a change short term, although they are also reducing
Most sources said
scrap prices in the coming weeks will hinge primarily on the
actual supply situation at U.S. export docks and the prices
they agree to as they navigate an apparent oversupply that
caused some exporters to sell grades such as heavy melt and
shredded scrap into the domestic market this month.