Scrap prices into Turkey have dropped sharply after a flurry of bookings concluded this week mainly from European suppliers. Rebar export deals, however, have failed to ignite with buyers holding off from purchases until they get a satisfactorily-low price following the rapid scrap decline.

After a deep-sea scrap cargo was heard at the beginning of the week booked from the US at $220/tonne cfr Turkey, four deals were heard from UK and Baltic merchants at $205/t for HMS 1&2 80:20. This represents a $15 fall on-week. Interestingly, on Thursday The Kallanish iron ore index for 62% Fe Australian fines rose to $55.75/dry metric ton cfr Qingdao, making the iron ore-scrap spread its narrowest so far in 2015.

Negotiations between Turkish mills and buyers in United Arab Emirates for October-shipment rebar deals have still not resulted in any transactions, making it the third consecutive week without rebar deals to UAE. “The Turks will now be in Dubai only next week,” a Dubai-based trader says. “They think the later they come, the more chance they’ll get bookings because the sentiment now is so negative.”

UAE importers expect to purchase only up to 75,000 tonnes of rebar for October-shipment, down from the 95,000t expected in September and the far higher tonnages in earlier months. This is because Emirates Steel has threatened to reduce its price for October deliveries if sufficient quantities arrive from Turkey. Bookings are expected next week from Turkey at $370-375/t cfr Dubai theoretical weight.

With scrap having come down, billet from China – last heard offered at $290/t cfr Turkey – is no longer seen attractive by Turkish mills. A cargo was heard booked, however, from a CIS mill at $274/t fob Black Sea, equating to maximum $289/t cfr Turkey. Both the selling and the buying party declined to verify this.

A Turkish mill source says he wouldn’t be surprised if it were true, given the downtrend in prices. This is despite the fact this booking price would be equal to prices of Chinese billet, against which CIS mills have found it impossible to compete in recent months.

Rebar offers for export are down to $370-380/t fob Turkey, with one trader saying $365/t is available, but no bookings are heard. “We haven’t got a single bid at $370,” says a Turkish trader. “People see the speed of raw materials price decreases and they expect it to affect finished product immediately… These cheap raw materials will come only in October.”