Turkish scrap/longs slump despite US booking
The Turkish scrap and rebar markets were quiet across the board this week. Concerns persist over the weak lira and thin demand, although the first US-origin scrap cargo of 2017 was booked, market participants tell Kallanish.
The US scrap cargo was heard booked at $282/tonne cfr Turkey for 16,000 tonnes of HMS 1&2 80:20 and $292/t cfr for 26,000t of bonus scrap. This represents a decline on the $290/t offers for 80:20 that US merchants had been holding out for since the last deal struck for US material shortly before Christmas. This indicates that Europe-origin 80:20 bookings are likely to drop below $280/t.
At present it is difficult, however, to see when bookings are likely to pick up, given the poor state of long products demand in both Turkey’s domestic and export markets. Turkish mills’ rebar quotes for export have come down $10/t on-week to $420-425/t fob Turkey, with one trader saying that even $415/t is available.
“Mills won’t sell anything because they have a hell of a lot of problems with selling,” a Turkish trader exclaims. “I’ve seen huge stocks piled up at mills in Iskenderun.” Another trader observes: “It is becoming harder day by day.”
The persistent weakness of the lira versus the dollar is complicating matters. The lira was at 3.8 per dollar on Thursday, but is anticipated by some to soon strengthen again. With some steel bought in dollars, this is causing buyers to postpone purchases. “If you get material today from a producer, you pay 3.8 liras per dollar, but tomorrow it could become 3.5, so you’ll lose money if you buy today,” a trader observes. “Everyone is waiting.”
Turkish mills are still pushing for billet export sales at $405/t fob, according to one trader, with another indicating even $390/t fob is available. But deals are hard to come by.
Source: Kallanish.com