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Fluctuating market but US scrap flows ‘strongly improved’

Falls of over US$ 7 per tonne for both HMS 80/20 cfr Turkey and HMS 75/25 fob Rotterdam are being reported by Argus Metals, recording new levels of US$ 450 and US$ 416.60 per tonne respectively.

An American supplier was reported to have sold 6 500 tonnes of HMS 80/20 at US$ 450 per tonne, 22 000 tonnes of shred at US$ 460 and 1 500 tonnes of bonus at US$ 460 cfr Turkey for shipment at the end of February/beginning of March.

US scrap flows have ‘strongly improved’ on the east coast since January domestic scrap delivery contracts settled at the start of last week, market analysts say. East coast steelmakers have bid for new material at US$ 25 below January levels while one US exporter expected prices to move down by US$ 30 for February settlements.

Turkish mills are not thought likely to show any strong scrap demand until they receive bid indications for large tonnages from their local or export markets. Because of major steel restocking in overseas markets during November and December, analysts argue it is difficult to see where the next overseas rebar bids will come from. Meanwhile, buyers continue to watch Turkish mills cut their scrap prices.

Turkish domestic stockist rebar bids have fallen by more than US$ 20 per tonne in Gebze, from US$ 658 to US$ 637.50 per tonne ex-works, and the latest demand remained very weak. Rates in Iskenderun have dropped to around US$ 628 per tonne ex-works. ‘Bids are likely to fall further after the latest scrap deal level for US material is digested,’ analysts say.

Chinese rebar sales to Hong Kong indicate that Turkish mills will only be able to sell standard-sized rebar at a maximum level of US$ 620-625 per tonne fob on actual weight basis. ‘Hong Kong’s restocking of many Chinese rebar cargoes in the past two weeks gives support to the Asian market, and Chinese domestic rebar prices did not fall today,’ Argus reported.

It is suggested that Hong Kong may now have replace Turkish material in the immediate future and, with Turkish mills yet to receive any large overseas bids, it will continue to keep the latter’s scrap demand ‘weak’.

Several deep-sea scrap exporters decided last week that taking a short position was the best option. ‘This accentuated the number of offers that were already in the market.’

Short-sea scrap bid indications fell below US$ 440 per tonne cif Marmara on 18 January for western Black Sea HMS 80/20 and suppliers have indicated they will drop to around US$ 440 per tonne cif. Argus Metals assessments for A3 cif Marmara and Russia-Ukraine fob Black Sea decreased US$ 8.80 per tonne to US$ 435 and US$ 417.50 per tonne respectively.

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