DAILY STEEL SCRAP: Prices correct down on news of fresh cargo from EU
A steel mill in the Marmara region booked a European cargo, comprising 20,000 tonnes of HMS 1&2 (80:20), 10,000 tonnes of shredded and 10,000 tonnes of bonus at an average price of £421 per tonne cfr.
The previous cargo sold into Turkey from the US was at £430 per tonne cfr on HMS 1&2 (80:20) basis earlier. As a result of the fresh European cargo, the daily scrap indices went down on Thursday April 1. Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was £416.94 per tonne on Thursday, down by £3.70 per tonne on the day.
After the monthly update in the premiums between grades and regions in the index calculations, the fall in the US index was larger. Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), US origin, cfr Turkey was calculated at £422.91 per tonne on Thursday April 1, down by £7.09 per tonne. This put the premium for US material over European scrap at £5.97 per tonne on April 1, compared with £9.36 per tonne on March 31.
Market participants said the correction occurred because of limited demand from the steel mills. “Most of the Turkish steel producers are still hesitant about buying deep-sea scrap, because they are struggle to reflect the scrap costs in their steel sales when scrap prices go above £400-410 per tonne. That is why the market made a downward correction,” a Turkish mill source told Fastmarkets.
“Despite the latest rebar export sales to Southeast Asia, the overall demand for rebar is still not strong enough to support scrap purchases in Turkey. The market in Asia is being clouded by the latest tax rebate cut talks in China, which might seriously affect Turkish exports to Asia,” a trading source said. “The market is very volatile [because of this] Chinese government’s decision could change everything,” he added.
A second mill source said the the workable price for HMS 1&2 (80:20) was now £420-425 per tonne cfr for Baltic Sea and US material, because mills are reluctant to go any higher. However, another mill source was not so sure about the downward correction in scrap prices. “The previous bookings done from the EU were at £410-415 per tonne cfr levels in the last week of March.
But I can’t be fully certain the market is making a downward correction until I hear lower prices from the Baltic Sea and [the]US.”
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