Turkiye: Mills postpone imported scrap bookings in anticipation of further correction

The Turkish imported scrap market witnessed a lull with limited deals happening. Meanwhile, imported scrap prices continued to fall for yet another week. Weak finished steel demand in domestic and overseas markets has impacted prices. Market participants believe mills and buyers will postpone bookings till they achieve more discounted prices. Two bulk cargoes were booked last weekend from the US.

Recent deals

• An Aegean region-based steel mill has a booked bulk cargo comprising 30,000 t HMS 1&2(80:20) and 15,000 t shredded at $360/t and $375/t CFR Turkiye basis respectively.
• Another cargo was booked from the USA, comprising shredded at $393/t and HMS 1&2 (95:5) at $380/t CFR Turkiye. These prices were equivalent to US bulk HMS 1&2 (80:20) at $370-375/t CFR.

SteelMint’s price assessment for US-origin HMS 1&2 (80:20) is at $350-355/t CFR, moving down significantly by $30-35/t w-o-w.

Market Overview

• Domestic scrap prices down again: Steel producers keep lowering their domestic scrap purchase prices on poor finished steel demand and negative market sentiments. Local producers decided to cut their purchase prices due to subdued buying activity and a recent fall in the import segment.
• Billet prices fall: The downward trend in the Turkish billet market continued due to a lack of support from the finished steel segment. Moreover, lower imported scrap prices have dragged semis finished prices down. Mills were not in a hurry to lower their offers, but they had to adjust billet prices to win deals.
• Domestic rebar offers fall further: Local rebar suppliers continued to revise their price ideas to local customers due to lack of trades and weak raw material prices. ICDAS offers have lost further to $640/t exw Biga and $651/t CFR Marmara, after the drop in imported scrap prices. The prices have come down to $80/t w-o-w. Other domestic rebar producers are following the same price trend.
• Turkiye’s auto output marginally up in H1: The Turkish automotive sector showed positive results during the first six months of 2022, though a global shortage of electronic components remained a challenge. Turkey’s automotive sector produced 649,311 units in January-June 2022, indicating a slight increase of 1.5% y-o-y in H1, according to the Turkish Automotive Manufacturers’ Association (OSD).

The high production in June contributed to an overall stronger balance. Total auto production was recorded at 135,425 units, up by 26.3% m-o-m in June.

Outlook: Suppliers remain reluctant to sell with sufficient discounts, while buyers need time to accept the higher price. Buyers opted to wait for further price correction as negotiations for fresh bookings remained slow.