Benelux scrap market eyes Turkey, prices under pressure

Pressure on Benelux scrap prices is increasing each day due to the prolonged absence of Turkish mills.

Although market participants were expecting to see a recovery in Turkey’s scrap demand after the Eid holiday, this has yet to materialise. Turkey’s silence is causing Benelux exporters to slow their collection and decrease their dock prices.

On Monday, exporters’ dock prices for HMS 1&2 80:20 in Belgium stood mostly at around €405-410/t ($425-430.5/t) levels, while in the Netherlands prices were around €410-420/t delivered. Although there are also higher prices quoted in both countries, they come mostly from exporters who are late updating their quotes, with sources expecting them to come down imminently.

A Benelux supplier tells Kallanish: “Amid a frozen market, it is really hard to talk about a price level. I think exporters will want to restock at €400/t levels. But please keep in mind that flow is very weak even at €410/t.”

A Benelux exporter who does not foresee a recovery in prices says: “Flow is weak but on the other hand exporters’ buying appetite is lacking due to the silence in Turkey. No exporter wants to commit today without seeing the clear picture in Turkey. I am really unsure at what level Turkey will start, but a definite decrease seems inevitable due to the high number of exporters that are ready to book prompt shipment cargoes. Dock prices will most probably fall below €400/t this week.”

“Sentiment is getting worse each day. Today we have seen sharp falls in steel prices in Turkey. This means Turkey will exert stronger pressure on scrap prices,” says a Turkish mill who thinks European HM 1&2 80:20 prices should not be higher than $500/t cfr.

Although there was a scrap buying tender in Egypt, it is heard to have been cancelled. Although Egyptian mills received EU-origin HMS 1&2 80:20 offers at around $515-520/t cfr levels, they did not rush to buy. Some market participants think that Egyptian mills will halt scrap purchases until they see Turkey’s buying prices.

The situation is no different in India. While prices are free-falling and sentiment is quite bearish, mills’ buying interest is weak. UK-origin containerised shredded price fell to $570/t cfr on Friday from $590/t cfr the week before. UAE-origin HMS 1&2 80:20 is offered at around $540/t cfr levels.

Burcak Alpman Turkey