Posted on 29 Mar 2019
Turkish mills have finally broken US scrap merchants’ resistance to lower bids, following another spate of bookings this week, market participants tell Kallanish.
Seven deep-sea scrap bookings have been reported this week, three from Europe, two from the Baltic and two from the US. The most significant of these is the latest US deal, for 30,000 tonnes of HMS 1&2 80:20 at $320/tonne cfr Turkey, 5,000t shredded at $325/t and 5,000t bonus at $330/t for end-of-April shipment.
This means one major US supplier has come down to Turkish mills’ earlier bids of $320/t cfr Turkey, and its compatriots are soon likely to follow. “The Americans need to sell – that’s the bottom line,” says a European scrap trader. US suppliers have come to the realisation that their local market will move sideways in April rather than tick up as previously expected, “… so there’s no attraction to wait,” he adds.
Another European scrap merchant doubts the validity of the latest US scrap deal, referring to another cargo reported simultaneously from Germany, which had HMS 80:20 priced at $318/t. “Rather peculiar that the differential for US/Baltic and Holland/Germany is so narrow, don’t you think?” he asks.
A Turkish scrap agent, however, says buyers will not pay above $315/t cfr Turkey for scrap today, which is the price he expects to see in the next booking round following the local elections on Sunday. “There are no buyers available at the moment,” he comments. “Mills have their cargoes and will take a breath.”
A Turkish steel trader points out that full shredded scrap is available from the US for the first time in a while. “This is meaningful because shredded is usually very valuable in the US market and it means they have availability to sell,” he observes.
Turkish rebar export quotes, meanwhile, have come down at the top end of the range to $490-495/t fob Turkey. However, sales remain at a standstill. One Turkish mill was, however, heard selling another 50,000t billet cargo to Saudi Arabia at $458/t fob, following its billet sale to the same destination earlier this month.
