London (Platts)--6Nov2012/108 pm EST/1808 GMT
US and UK premium suppliers are giving stronger indications for heavy melting scrap I/II (80/20 blend) than sales last week below $400/mt CFR Turkish ports for UK-origin material after US local prices shot up for November settlements, market participants said Tuesday. Offers for premium UK and US HMS I/II (80/20 blend) were heard in a range of $405-420/mt CFR Turkish ports, while even some Black Sea suppliers were chasing $400/mt CFR for A3, having sold $10/mt previously--at a level that failed to yield much supply, according to a range of market participants. "After today, even the low-end [$405/mt CFR] of that range may not be available," an agent for a major recycler said. US scrap suppliers are undoubtedly emboldened by another HRC price hike announced Tuesday in the US market: the last time this occurred (a $40/st HRC increase was announced to the market mid-October), US-origin deep-sea scrap offers shot up too. Recent experience shows that the Turkish producers are unable to source enough scrap to run at high levels of capacity utilization without US supply, but US shipments have not been a tangible aspect of the physical market in the last few weeks. Baltic, UK and West European sellers have enjoyed much of the activity, selling in the gap below where US-origin offers have been. Platts daily assessment increased to $400/mt CFR Turkish ports for HMS I/II (80/20 blend) Tuesday as a result of the higher offers. Platts other two scrap assessments strengthened Tuesday on the back of the above market activity. Other than in their local markets, though, Turkish producers are seeing margins squeezed for finished steel sales--some South American purchases aside--with rebar above $600-610/mt FOB struggling to sell, according to one EAF producer in Turkey. "At the moment, billet from the Black Sea is a better option than scrap from the US," a procurement official at a Turkish producer said. --Ciaran Roe, ciaran_roe@platts.com --Edited by Richard Rubin, richard_rubin@platts.com