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Turkish mills avoid bulk scrap bookings on longs weakness - 23 January 2012

Turkish mills showed little interest in scrap bookings last week as activity and prices in the regional longs market continued to weaken, although news of lower, Europe-origin offers surfaced Friday to give pricing direction, participants tell Steel Business Briefing.

One West European HMS I/II (70/30 blend) cargo was offered last week at $430/t CFR Turkish ports. The last HMS I/II (70/30 blend) trade out of West Europe went through at a $26/t discount to US-origin HMS I/II (80/20 blend). Offers of the equivalent West European blend came in at $440/t CFR Turkish ports, Turkish traders hear.

Rebar sales fell at least $25/t to $655/t FOB last week compared to a fortnight ago.

Furthermore, two Turkish steelmakers sold last week at $655/t FOB to traders, meaning that $455/t CFR for HMS I/II (80/20 blend) is the level needed to break even, according to traders. In a falling market, and with billet having slipped $30/t in the same period that scrap has barely traded into Turkey, scrap bids could be forced yet lower.

"Producers made no profit out of the recent price hike in scrap," one mill trader suggests. "The $470/t CFR bookings made recently will be delivered in February and rebar orders for that time could have fallen even further."

Market participants note that since the scrap-driven pricing bubble began in late November, very little has changed in terms of fundamental, regional demand for long-rolled steel.


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