Turkish steel producers continued to pay higher prices for deep-sea scrap after securing more billet sales into China, market participants told Fastmarkets on Tuesday May 11.
A steel mill in the Marmara region booked a Baltic Sea cargo, comprising HMS 1&2 (80:20) at $495 per tonne and plate and structural (P&S) at $505 per tonne cfr. The cargo breakdown was not clear at the time of publication.
The previous Baltic Sea transaction was closed at $488 per tonne cfr on HMS 1&2 (80:20) basis at the end of last week.
As a result, the daily scrap indices increased further on Tuesday May 11.
Fastmarkets' daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was calculated at $494.48 per tonne, up by $5.10 per tonne day on day.
The daily index for steel scrap, HMS 1&2 (80:20 mix), US origin, cfr Turkey was calculated at $499.06 per tonne, up by $5.11 per tonne day on day.
This put the premium for US material over European scrap at $4.58 per tonne on Tuesday May 11, compared with $4.57 per tonne on May 10.
The increase in prices was mainly because of the recent changes in the Chinese tax policy, which has led to an increase in demand for Turkish billet and long steel in Asia.
At least two steel mills in Turkey were said to have
sold around 100,000 tonnes of billet to China at $700-705 per tonne fob at the beginning of the week.
Fastmarkets'
weekly price assessment for steel billet, export, fob main port Turkey was $670-680 per tonne on Thursday May 6, up from $600-610 per tonne on April 29.
Steel mills in Turkey were still cautious about the spike in prices, however, according to market participants.
"Turkish steelmakers are uneasy at the moment because the prices have reached [such] high levels. They are worried [about being] left with high-priced raw materials in hand. So, the mills are mostly [only] buying scrap as long as they sell billet or rebar," a Turkish mill source told Fastmarkets.
"If China stops buying billet today, the market would go into a nosedive," he added.