Amid continuously falling prices for import scrap in Turkey, Russian and Ukrainian scarp collectors have been completely displaced from the market. And the most topical question now is for how long the suppliers will have to hold back from exports.
Thus, bids of the main consumers of Azov-Black Sea scrap, Turkish mills, have dipped to $280-290/t c&f, which is totally unacceptable to most exporters. In fact, the only suppliers that can export the material at the above prices are European ones, which have no alternative destinations due to absent demand in local markets. Besides, because of considerable euro devaluation last month, their prices dropped more in the dollar terms.
In particular, bid prices to Russian north-western exporters should be at $290/t fob, which means $335-340/t c&f Turkey including the current freight rates. However, most of them do not expect the prices will reach these levels till end-July and have temporarily minimized or even suspended purchases of the material at ports.
Thus, St. Petersburg exporters are ready to buy the material at $200-205/t cpt, against $205-210/t cpt at the beginning of the month. The suppliers say if they close deals at the prices Turkish steelmakers are bidding, they should buy scrap at no higher than $175-180/t cpt and it would take several months to collect the material for the smallest export lot.
Noteworthy, not only the bids in foreign markets but also those from domestic consumers are unacceptable for them.
For example, two largest scrap consumers in the Central district of Russia – Severstal and BMZ – are ready to buy A3 material from St. Petersburg at $246/t delivered (freight rate is $31/t) and $256/t daf (cost of delivery to Belarusian border is $34-35/t), respectively, which is not quite attractive to exporters amid the current purchase prices at ports.
After Rostov scrap collectors serviced the latest contracts made back in the period of active trade, they have reduced buying prices by $10/t to $205/t cpt and have practically suspended purchases. They are also ready to sell scrap at no less than $290/t fob ($320-325/t c&f Turkey).
Offers of Ukrainian material are also unworkable standing at no lower than $310-315/t c&f Turkey, which is equal to $285-290/t fob excluding the shipping fees. Based on these prices, the material at ports may be purchased at $210-220/t cpt, which is the lowest level amid the current prices in the domestic market.
Most market players agree Russian and Ukrainian scrap collectors will hardly be able to sell the material for export in the near future. Firstly, the finished product market outlook is gloomy. Secondly, Turkish steelmakers fully cover their scrap requirements with cheaper European material.
(Source: www.metalexpert-group.com )