A Turkish steelmaker in Iskenderun, Turkey, received one cargo from the
Venezuela's state-run company Corpovex in September, registering the
first shipment from the crisis-hit country in 2019.
The mill booked a cargo containing 24,892 mt of scrap from Corpovex
in August for $7.2 million, Turkish Statistical Institute, or TUIK, data
showed, corresponding to $289.6/mt.
With the HMS 1/2 (80:20) benchmark trading around $290-$295/mt CFR
Turkey at the time of this booking, this suggests the material received
only a small discount, depending on the composition of the grades in the
cargo.
This was also confirmed by the Turkish buyer of the cargo, who
stated the purchase was only "a bit, not much" cheaper than comparable
bookings from other destinations.
However, the Turkish mill told S&P Global Platts also that the seller was "not a regular supplier."
In August, a comparatively low melting margin and a wide gap between
Turkish mills' price expectations and offer levels from traditional
scrap sellers in the Benelux, Baltics and North-America were likely to
have encouraged such a trade.
The ship carrying the cargo arrived in Iskenderun on September 2,
2019, having left Puerto La Cruz on August 13, according to cFlow,
Platts trade-flow software.
While the purchase was the first one in 2019, TUIK data showed that
Turkey has bought four steel scrap cargoes in the last three years from
Venezuela, with three of them sold by Corpovex.
A presidential decree issued on August 21, 2018, effectively
nationalized the scrap exporting sector in Venezuela, giving Corpovex
the monopoly to sell scrap abroad.
The most active buyers of Venezuelan scrap in the previous years
were China and Taiwan, according to export data provided by Panjiva, an
S&P Global Market Intelligence unit.
Next to scrap, Turkey has also continued to buy gold and oil from
the country, as US sanctions have eroded the vast majority of
Venezuela's customer base.
Venezuela has sold around 24 mt, worth $40 million, of gold to the
United Arab Emirates and Turkey since April, according to a July report
by S&P Global Market Intelligence, as Turkey showed some support for
Venezuelan President Nicolas Maduro.
In August, the Turkish foreign ministry said it "disapproved the US
Executive order" that would place more sanctions on the Venezuelan
regime.
