The Turkish market is still seeing few deals for import scrap this week. Having returned to the market in late March after a three-week break, mills continue to consider scrap purchases at the current prices an extreme measure. Given the current situation in the steel product markets, the only reason for steelmakers to sign contracts is the very low level of stocks which endangers production of the booked volumes. As before, Turkish longs exporters can hardly do business in their main sales outlets, so steelmakers have to sell to alternative destinations, but even there they have to trigger buying by cutting prices regularly. In particular, export prices for Turkish rebar have dropped to $655-665/t FOB, by another $5-10/t over the past week. At the same time, US and European traders are unwilling to slash prices – they have cut the March peak levels by no more than $15/t.
US exporters have managed to keep offers unchanged owing to stronger demand in alternative markets (Italy, China and Egypt). So, a Turkish mill has booked two mixed lots of US scrap on a tender basis in early April. One lot (13,000 t of HMS 1&2 (80:20), 10,000 t of shredded scrap and 2,000 t of P&S) has been sold at $455/t C&F, $460/t C&F, $465/t C&F, respectively, while another one (12,000 t of HMS 1&2 (80:20), 12,000 t of shredded material and 16,000 t of P&S) – at $454.4/t C&F on average. On March 25, a mixed lot from Canada (HMS 1&2 (80:20), shredded scrap and P&S) was booked at $450 C&F, $455/t C&F and $460/t C&F, respectively. Besides, 40,000 t of HMS 1&2 (80:20) have been sold at $445/t C&F at the end of the week. The most recent deal has been for a mixed lot (25,000 t of HMS 1&2 (80:20) and 16,000 t of shredded scrap) at $447.5/t C&F.
Traders report that only state-owned companies can work at these levels, as they face fewer problems with steel product sales due to government orders.
At the same time, US dollar prices from European exporters are supported by the strengthening euro, making most companies keep staying aside. Only a Danish trader has managed to close a deal, having agreed to sell 22,000 t of shredded scrap and 6,000 t of HMS 1&2 (90:10) at $445/t C&F, by an average of $10/t lower than last week.
However, even these levels are unattractive to steelmakers, and prices must be cut by $5-10/t more, market players report.
If demand for finished steel remains stable in April, exporters will have to decrease offer prices. Moreover, given current sales in the market, traders will be forced to grant discounts by mid April. US and European exporters claim mills have almost fully restocked for April production, and thus scrap collectors will not have any opportunity to push through an increase until the end of the month.
Scrap collectors in the Black Sea basin are unable to resist steelmakers’ pressure, and thus quotations of Russian and Ukrainian material have decreased by $35-40/t down from the March peak levels by now. Suppliers need to replenish cash reserves and are ready to deal even at $420-430/t C&F Turkey, because unlike most US and European suppliers, their financial situation does not allow them to struggle long. Besides, some exporters need to destock in order to secure sites for cheaper material.
( Source: www.metalexperts-group.com )