Turkey Ferrous: Price Down As Bids Fall

The Turkish scrap import price fell to close to $490/t cfr today as mills were able to lower bids in the face of plentiful offers despite a continued gradual increase in export rebar prices.
Turkish mills gave bid indications slightly below $490/t cfr for premium HMS 1/2 80:20 with around 10 deep-sea offers in the market. Baltic sellers were attempting to achieve prices around $492/t cfr.
A US supplier sold an additional 14,000t to a Marmara mill for an existing cargo sale for July shipment late on 8 July, with HMS 1/2 80:20 and shred in the top-up tonnage priced at $493/t and $508/t cfr. The vessel is loading now.
US exporters will likely attempt to push dockside purchasing prices down if they are considering sales at $490/t cfr Turkey or lower. European exporters are already having to push for lower dockside purchasing prices at the start of this week because of their far more restricted margins and the fall in Turkish import price in the past five days. Bids stood today at €355-360/t delivered to dock for HMS 1/2 material.
Turkish mills are profiting more and more by the availability of scrap moving into the middle of July as their export rebar prices continue to inch up amid strong demand, and as Chinese domestic steel prices rise significantly. A Marmara mill sold 10,000t of rebar to Bulgaria at $730/t fob at the end of last week. Argus’ daily fob Turkey steel rebar assessment increased $1.30/t today to $728.80/t fob on actual weight basis.
The widening scrap-rebar margins being realised by Turkish mills likely means that mills will be able to tackle negotiations and high freight rates with distant overseas buyers such as southeast Asia and south America, as at these scrap price levels they can easily afford to accept lower fob prices with these destinations and sell even more volume.
If Chinese steel prices continue to rise this week, and if scrap availability dries up later this month, Turkish mills will be in a comfortable position to start increasing bid levels immediately.
Turkish steelmakers are already close to the $240/t scrap-rebar margins they managed in May and it is not expected that they will breach those levels. Underlying scrap availability is not that plentiful and the current decrease is the product of too many sellers coming to the market at the same time after most mills’ three-week withdrawal in the second half of June and early July.
Nobody surveyed in the US scrap market expects any upside to HMS prices at the beginning of August also, which may have encouraged US exporters to begin bringing down the Turkish scrap import price last week with their high stock levels.