Posted on 22 Jan 2020
Turkish mills, being unable to sell rebar at desired prices, have increased their pressure on scrap prices.
Deep-sea scrap suppliers, despite having availability, are seen to be waiting for Turkish mills to start inquiring and bidding before offering their cargoes. Turkish mills are using the latest US-origin scrap booking as a reference point. Their price idea stands at $275-280/tonne and $280-285/t cfr Turkey for European and US-origin HMS 1/2 80:20 respectively. However, their demand for deep-sea cargoes is yet to recover from low levels.
Some mills are inquiring about short-sea scrap and bidding at $270-275/t cfr. A small cargo of short-sea scrap from Bulgaria is heard to have sold at $275/t cfr.
Although Turkish mills have sold some large-tonnage rebar cargoes to Singapore and Hong Kong since last week, prices have remained way below desired levels. Margins are squeezed by the low rebar prices and mills are thus trying to force scrap prices down, despite their need for the material. There are also, however, many deep-sea suppliers that need to sell in the Turkish market.
A US-origin scrap supplier tells Kallanish: “All deep-sea suppliers, without exception, have at least one cargo to sell. However, offering without having an inquiry puts you in a desperate position now. We are therefore initially waiting for Turkish mills to come with an inquiry.”
“The only market that was inquiring for rebar was the Far East,” says a Turkish steelmaker. “Now that they are gone for the Lunar New Year holidays, there is no market left where we can sell high-volume rebars… HMS 1/2 80:20 scrap prices should not be more than $270/t cfr under current finished steel market conditions.”
As almost all Baltic scrap suppliers have cargoes and not many alternatives to sell to other than Turkey, they may be the first to agree to Turkish mills’ desired prices. On the other hand, with the recent Far Eastern rebar sales, Turkish mills’ scrap purchases for February shipment have become still more inevitable. Kallanish therefore expects to see some scrap sales in the second half of the current week
Source:Kallanish
