Turkish imported scrap remains silent on impact of tremor

Turkish imported scrap buyers and steelmakers are on a pause in their trade activities throughout the week. This week’s trade flow was disturbed due to the unwanted disaster occurred in the country earlier this week (6 February 2023).

Turkish mills reported some deals late last week, and no scrap trades were reported recently. Even though the disaster did not directly impact the mills in northern and western Turkiye, many market players said that normal business activity was on hold for some days at least. The fire and damage to Iskenderun port on the Mediterranean Sea caused by the earthquake led to the stoppage of operations and significant logistics disruptions in the nation.

Negotiations were lacking in the ferrous scrap sector since Turkish mills remain out of the market. “Turkiye is blocked today, there are issues with logistics since there are destructions, and fires in certain ports, and highways, as well as with employees in the mills. Everything is being done to support victims of the accident,” a source said.

SteelMint’s daily assessment for HMS 1&2 (80:20) from the US stood at $425-430/t CFR Turkiye, unchanged w-o-w.

The Turkish lira maintained stability and was traded at 18.83 against the dollar on 9 February 2023.

Deals before tremor:

• A West Marmara mill booked a cargo, comprising 15,000 t of HMS (80:20) at $426/t and 15,000 t of bonus at $446/t.
• Another cargo containing 28,000 t of HMS (80:20), 6,000 t of HMS 1/ PNS, and 6,000 t of shredded, was booked by a Mediterranean mill at an average price of $427.5/t.
• The baltic-origin deal, bulk cargo containing HMS (80:20), and the bonus were booked by a Mediterranean mill at $421/t and $441/t CFR Turkiye, respectively.

Market Overview

With the participants currently trying to recover from the shock, the consequences of the tragic events are believed to be substantial for the local steel sector.

• Scrap purchase in Jan’23 up: According to market sources, Turkiye’s steelmakers need more than 1 mnt m-o-m. Since December data were lower, the buyers showed improvement in buying of scrap in January 2023. The US sold the maximum number of batches to the country. The majority of the lots bought last month were slated for delivery in February.
• Rebar exports down in CY’22: Turkish rebar producers were compelled to cut exports by 1.7 mnt last year due to significant cost and demand pressure, particularly in the second half of 2022. The general situation was only made worse by December’s results, which saw volumes roughly drop.

Earthquakes affected several provinces in the country’s southeast, which is home to around 30% of Turkey’s steel-producing electric-arc furnace (EAF) capacity, equivalent to approximately 11.7 mnt (per year) of steel production.