Turkey: Imported scrap prices down amid sluggish trade, sharp correction less likely

Turkey’s imported scrap market was mostly silent this week with very limited deals reported. Meanwhile, finished steel sales improved as domestic sentiments picked up slightly.

At the beginning of this week, a Black sea region-based mill booked HMS 1&2 (80:20) at $455/t CFR basis from a German supplier.

SteelMint’s assessment of US-origin HMS 1&2 (80:20) stands at $465/t CFR levels, down further by $5/t w-o-w. Prices are hovering at around five–month lows since January.

Most market players believe that imported scrap prices will depend on finished steel sales. Although rebar sales resumed this week, demand is still sluggish. Therefore, steel producers are hesitant to book fresh material (scrap) at higher prices, SteelMint learnt.

Additionally, with Indian government imposing steel export tariffs lately, prices of some steel products are likely to increase and so will global demand. This could boost steel exports from Turkey, market sources expect. Also, it is expected that imported scrap prices may not see a sharp drop further from its current levels.

Market overview-

• Lira plunges: The Turkish lira plunged to a five-month low amid a steep drawdown in the central bank’s reserves and its monetary policy. Lira is trading at 16.37 against the dollar. A weaker lira typically leads to an increase in finished steel prices in the domestic market.
• Domestic scrap follows imported price trend: A few mills lowered their domestic scrap purchase prices following the drop in imported scrap prices, as well as weak finished and semi-finished markets. Hence, mills have adjusted their scrap purchase prices.
• Domestic billet market positive: Domestic billet market sentiments are more positive compared to last week. Most market participants prefer to wait and watch to see clear trend. Local billet offers were heard at around $710-730/t exw this week.
• Finished steel market picks up: Rebar market started to recover after a prolonged downtrend. Mills tried to set higher offers for export and domestic material. However, the workable level remained unmoved so far. Turkey’s long steel producer ICDAS kept its prices unchanged at $780/t exw-Biga and $791/t CFR Marmara.