NEW YORK U.S. ferrous scrap exporters have sold at least three new bulk cargoes to Turkey amid a push by mills to lower prices.
As higher offer prices from the United States sent Turkeys mills to the Baltic region for their scrap needs this month (amm.com, Aug. 18), market participants reported five fresh bulk cargo sales to Turkeythree originating on the East Coast, one from Europe and one from Africa.
One trading company booked a sale out of Florida at an average price of $387 per tonne c.i.f. Turkey for 16,000 tonnes of an 80/20 mix of No. 1 and No. 2 heavy melt and 10,000 tonnes of HMS 1&2 (90:10).
A second East Coast exporter booked a sale at $387 per tonne for 13,000 tonnes of HMS 1&2 (90:10), $392 per tonne for 12,000 tonnes of shred and $397 per tonne for 2,000 tonnes of plate and structural scrap.
A third East Coast booking was reported at $385.50 per tonne for 16,000 tonnes of HMS 1&2 (80:20), $390.50 per tonne for 20,000 tonnes of shred and $395.50 per tonne for 4,000 tonnes of plate and structural.
Market participants said the large volumes of shred could keep collection prices at the docks strong as HMS 1&2 (80:20) price levels of around $385 per tonne are about $10 per tonne higher than early July levels.
Buyers in Turkey said they will aim to hold prices at current levels or lower as Turkish mills struggle to achieve price increases for steel and have received offers for a number of scrap cargoes, indicating a healthy supply.
"I do not think prices will go up further. Actually, I expect some decrease soon, but not a sharp decrease. There are lots of deep-sea offers now in the market," one Turkish buyer said, adding that most of the offers he received were from U.S. exporters and trading companies.
With rebar prices at $585 per tonne, mills will look to reduce their scrap import price, said one Turkish trader, who expects the number of unsold cargoes to offer some downside support. A second trader said that a stronger U.S. dollar also could contribute to softening prices.
"I think U.S. exporters will have to soften their prices, as the Turkish mills are not willing to buy in the range of $390 to $395 for HMS 1&2 (80:20). Also, I hear from my sources that many are turning to hot-briquetted iron (HBI) and direct-reduced iron (DRI) as the price difference went from $20 to almost $3," one consumer source said.
Economic turmoil in Venezuelathe worlds largest supplier of HBI/DRIhas resulted in mills looking to countries like Libya for the material. A large Egyptian mill recently booked 10,000 tonnes of HBI from Libya at $378 per tonne c.f.r. Egypt, the consumer source said.
A third Turkish trader said the market expects more scrap cargo bookings as mills have thus far purchased only 50 percent of their typical monthly needs. "I expect another 10 to 15 cargoes to be sold for September if production and consumption go at the current rate," he said.
One U.S. exporter said he doesnt expect prices to drop. "I dont see it going down. U.S. mills seem busy for some time and will look to coastal supply, which is long gone with the international liquidity pickup since July," he said.