The Turkish market for ferrous scrap remains calm this week. Only several companies have managed to sign deals. Suppliers have become pessimistic by the end of the week having failed to fix prices at previously reached levels as they expected several days ago. At the moment, it is extremely unlikely that deals will be made at previous levels, let alone a lift in quotations. Negative developments in the scrap segment are attributed to situation in the finished product market, which gets worse every day. The slide in prices for longs and semis has grown into steady trend. Domestic rebar prices have lost $80/t as compared to early June peaks, falling to $707-714/t EXW. Foreign buyers also show slack demand for Turkish steel products. Export prices for rebar and square billet have dropped to $710-720/t FOB and $670/t FOB respectively due to wait-and-see attitude of foreign customers.
Watching the fall in quotations of main steel product items offered for export, the mills are in no rush to resume scrap buying in an attempt to make traders cut prices. The only thing that prevents US and European exporters from substantially reducing their offers is the current price difference with steel products resulting from a speculative upturn in finished product quotations in end-May.
However, that gap is shrinking rapidly, so some scrap collectors start to back down, realizing that it is inevitable. In particular, a batch of HMS 1&2 (70:30) has been reportedly sold at $436/t C&F Turkey, $20/t below the previous levels of transaction prices. The similar offer of 30,000 tonnes of the material has not found any buyers.
However, most exporters believe that there is no need to cut prices that much and quote HMS 1&2 (80:20) at $455-465/t C&F and shredded scrap – at $470-475/t C&F.
US traders have offered only $5/t discounts. Robust demand in the US domestic market and a number of alternative outlets enable them to keep quotations up. Estimated prices for US scrap have moved to the following levels: HMS 1&2 (80:20) – $475-480/t C&F, shredded scrap – $480-485/t C&F, P&S material – $485-490/t C&F, $5/t below transaction price maximums. Noteworthy, some companies were quite aggressive during negotiations. The attempts of one of the largest Turkish mills to attract material from the USA at the beginning of the week encountered the level of $490/t C&F, so the mill had to leave the market.
Metal Expert estimates by early July an upcoming fall in prices will be reflected in transction levels. However, prices will not decrease substantially in view of rather small volumes of the material available, and deals for HMS 1&2 (80:20) will probably be signed at $460-470/t C&F.
In the Black Sea region business activity is minimal. At the moment CIS scrap exporters have stuck between high domestic scrap prices and weak demand in Turkey.
Scarce offers of A3 material from Russia are priced at about $460/t C&F, while Ukrainian traders are reportedly unable to sell their material even at $455/t C&F. CIS export scrap segment will hardly revive next week.
( Source: www.metalexpert-group.com )