Turkey: Steel mills resume bulk scrap bookings, prices range-bound

Global scrap market remained optimistic as imported scrap prices have observed stability in the new year after continuously moving north and touching nine-year high levels in Dec’20.

With this stability, Turkish buyers have resumed their deep-sea bulk cargo bookings this week after remaining quiet in the last week, due to holidays. There is room for Turkish buyers to place fresh bookings for Feb’21 shipments, SteelMint understands.

SteelMint’s assessment for USA origin HMS 1&2 (80:20) stands at $478/t CFR Turkey, mostly stable as compared to last week.

Recent trades-

Market highlights-

• Hike in overseas demand keep buyers active in Turkey– Increasing steel demand in domestic as well as overseas market have kept the Turkish buyers active in continuous bookings of new bulk cargoes. Turkey’s steel exports have observed an increase of 10% m-o-m to 1.49 mn t in Nov’20 as compared to 1.35 mn t exported in Oct’20.
• Russia raises duty on steel scrap export-The minimal export tariff would go up to Euro 45/t, as per the recent media reports. The duty will come into effect from late Jan’21 for six months. Russia exported around 4.5 mnt ferrous scrap in CY’20 with Turkey and South Korea being the key destinations.
• Resumption of scrap import in China may create hurdle- Imported scrap bookings in China have regained momentum after Government lifted restrictions on few grades of scrap. Few deals were concluded with Japan. It may create some huddles in the imported scrap market as prices may go up further.
• Spot iron ore fines price increased by $9/t – Chinese spot iron ore fines (Fe 62%) index increased by around $9/t on a weekly basis and stood at $167.95/t CFR China yesterday against $158.9/t a week ago. After a week-long holiday, Chinese markets resumed on 4th Jan’21, following which spot prices have increased by $3.45/t in the last three days.

Outlook- China’s presence in the imported scrap market and Russia’s hike on steel scrap exports duty may force buyers to think twice before placing new orders. It may also reduce the imported scrap volume to Turkey.