Disappearing Indian demand worries Benelux scrap exporters

Benelux exporters, previously reliant on Asian scrap demand amid slow Turkish buying, are exercising caution following the slowdown in Indian scrap demand and lower prices in Turkey last week.

While most exporters are refraining from building stocks amid uncertainty, instead just watching the market, some exporters need to buy and are seen paying €320/tonne ($314) delivered for HMS 1&2 80:20. Although suppliers are targeting €330/t and above, they seem to have started to panic as there is no longer any support from demand, following worsening sentiment and lower Indian interest.

In Turkey, two EU-origin HMS 1&2 80:20 deals were heard done last week at $363/t and $367/t cfr Turkey. The price difference between the deals arises mostly from the origin as Turkish mills usually pay a premium for ex-Germany material.

A Benelux supplier tells Kallanish: “We are at €320/t today but the flow is very weak. Even if the material does not come, we will decrease our dock price anyway.”

Although European suppliers are targeting to sell HMS 1&2 80:20 at above $365/t cfr, Turkish mills’ price targets are even lower than the latest deal values. Most market players believe prices will drop to $350/t cfr levels in the coming days as Turkish mills are pushing scrap values down amid high production costs, lacklustre steel sales and pressured steel prices. Moreover, the number of scrap offers seems to have increased in the Turkish market, while crude steel production continues to decrease.

One Turkish mill says: “Actually, a fall in prices was inevitable in Turkey, but suppliers, referring to Indian demand, were trying to hold prices firm. Even though they also knew that Asian demand is far from being able to replace Turkey’s volumes, they were holding on to it. Now that they have lost their only weapon, we will see what happens.”

In India, containerised shredded offers stand at $450-455/t cfr Nhava Sheva levels, unchanged on-week. Demand, however, decreased remarkably compared to previous weeks.

Burcak Alpman Turkey