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Turkish deep-sea scrap purchases rise sharply

Turkish deep-sea scrap purchases rise sharply

News is brought to you by Mr. Shailesh Karia

Published on 9th October, 2019 

Argus tracked 36 deep-sea bulk sales to Turkey in September, comprising a combined 1.103mn t. 

At least another six unadvertised deep-sea cargoes totalling 183,000t are estimated to have been sold to Turkey in September, which would take total Turkish deep-sea volumes purchased over the month to 1.286mn t. 
The volume of sales tracked in September is almost double the 529,000t tracked across 15 deals in August. Turkish steelmakers held back from scrap purchases in August because of weak domestic and global steel demand set against relatively firm import scrap prices, which only started to experience significant downward movement at the end of the month. The Argus HMS 1/2 80:20 cfr Turkey assessment averaged $282.77/t in August, down by only $12.18/t from July despite increasingly bearish sentiment.
The lack of purchasing activity in August meant exporters had a greater urgency to sell in September, which combined with a further deterioration of the global ferrous price complex to trigger a sharp fall in the Turkish scrap price. The Argus HMS 1/2 80:20 cfr Turkey assessment averaged $238.56/t in September, down by $44.21/t from the previous month and the lowest monthly average since October 2016.
US-origin deep-sea scrap purchased by Turkish mills in September totalled 359,000t, according to Argus records. UK-origin deep-sea material surpassed continental European volumes, with 237,000t sold versus 213,000t.
Baltic/Scandinavian deep-sea scrap sold to Turkey in September totalled 187,000t and St Petersburg deep-sea scrap reached 142,000t.
A single global scrap exporter sold 226,000t to Turkey in September, accounting for over 20pc of Turkey`s total tracked purchases.
An Izmir mill purchased at least 10 deep-sea cargoes in September, comprising a minimum 313,000t. Several Turkish mills increased their scrap purchasing lead times to around 5-6 weeks in the second half of September. The purchase of November shipment cargoes in September was read by market participants as a sign that Turkish mills were looking to stabilise prices in the short term while also giving them an opportunity to take a break from the scrap market in the medium term for a substantial period if steel demand deteriorated further.
A St Petersburg exporter was today confirmed to have traded a November shipment deep-sea cargo on a confidential basis with a Turkish mill before the middle of September. The market was only aware of Turkish mills beginning to buy November deep-sea shipments after the middle of September.
The premium HMS 1/2 80:20 portion of the St Petersburg cargo was priced at $235/t cfr Turkey.
Three major Turkish mills were not heard to have made any deep-sea scrap purchases in September, although one did buy a deep-sea cargo on 4 October at the same time as prices firmed slightly. Of the other two steelmakers, one Marmara mill purchased small deep-sea and short-sea cargoes from Europe and the Baltics throughout September and an Iskenderun mill is expected to buy at least two deep-sea cargoes before the end of next week. 

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