The Turkish imported bulk ferrous scrap index remains largely stable w-o-w amid minor fluctuations with the market achieving a balanced price level.
Sellers remained firm, while buyers were retreating. Indicative tradable values for US-origin HMS (80:20) were also reported at $370/t CFR.
In contrast, EU-origin HMS (80:20) values were indicated at $365-367/t CFR, with recyclers maintaining firmness due to rising collection costs.
Collection costs in the Benelux region were reported at Euro 295-300/t delivered to docks, prompting an EU recycler to suggest a minimum price of $370/t CFR for exports to Turkish mills.
Assessment trends
- BigMint’s assessment for US-origin HMS (80:20) bulk scrap stood at $370/t CFR and remained stable w-o-w.
- BigMint’s assessment for bulk HMS (80:20) from the US East Coast stood at $345/t FOB, up by $3/t w-o-w.
Market Commentary
EU recyclers observed that mills delayed their bookings last month, leading to increased interest now. As a result, more bookings are expected this week. US exporters, having completed September shipments, have raised their October shipment offers to $375/t CFR. Additionally, deals were finalised during the week were at $370-371/t CFR levels.
A Turkish buyer said, “Mills should focus on scrap if margins to rebar prices are favourable,” with an indicative tradable value of $370/t CFR. He also mentioned, “Sellers will try to increase margins, while mills will need scrap but tough market conditions in Asia will be highlighted to attract sellers.”
Another supplier mentioned that monitoring the Asian iron ore market for indications on billet offers from China is important which were heard at $460-470/t CFR.
Scrap-to-rebar margins have improved, with FOB sales at $585/t and local sales ranging from $590-595/t.
Recent deals:
- A Lithuanian-based supplier sold a bulk cargo comprising HMS(80:20) at $367/t to a West Black sea region-based mill on a CFR Turkiye basis.
- A US-origin supplier sold a bulk cargo comprising 16,000 t of HMS (80:20), 6,000 t of shredded, and 7,000 t of PNS at $370/t, $390/t, and $390/t CFR Turkiye, respectively, to a Mediterranean region-based mill.
- The same supplier sold another bulk cargo to a West Marmara Region-based mill, with HMS (85:15) and shredded priced at $372.5/t and $390/t CFR Turkiye, respectively.
- A US supplier sold HMS (80:20) bulk cargo at $370/t CFR-Turkiye to a West Marmara Region-based buyer.
- A Northern European supplier sold HMS (80:20) bulk cargo at $366/t CFR to an Aegean Region-based mill.
- A U.S.-origin supplier recently sold a bulk cargo of HMS (80:20) at $371/t to a mill in the West Black Sea region.
- Another U.S.-origin bulk shipment, which included HMS (80:20), Shredded, and Bonus grades, was booked by a mill in the Mediterranean region at $370/t and $390/t CFR, respectively.
- A Baltic (Lithuania) origin bulk scrap cargo was sold to an East Marmara region mill at $368/t for HMS (80:20) and $388/t for Bonus grades.
- A German supplier sold a bulk scrap cargo comprising HMS(80:20) and Bonus at $366/t and $386/t respectively to an Aegean region based mill on a CFR Turkiye basis.
Billet imports from China
According to a trader source from Turkiye, “Recently, more Chinese billets have been booked at just under $465/t CFR Turkiye. Mills facing material shortages are currently willing to pay higher scrap prices. However, the influx of billets in the last quarter and early third quarter is expected to exert downward pressure on scrap prices. Consequently, scrap prices are likely to remain within the $370-380/t range in the coming days.”
In the import market, Chinese billets for November shipment were available at $465/t CFR.
Market insiders confirmed that two Turkish mills have recently purchased billets from China.
Billet market active in Turkiye: Despite expectations that Turkish mills might shift to scrap purchases, semi-finished product sales remained active throughout the week. Both local and foreign suppliers offered billets, though some sellers had to reduce prices due to competitive Chinese pricing.
Kardemir announced a $5/t price cut for 150×150 mm billets, bringing prices to $530/t exw for S235Jr and $545/t exw for B420 grades. Discounts include $20-25/t off for 5,000 t and an additional 1-2% for cash payments over 500 tonnes, reducing the price to $505/t exw. Kardemir has sold about 40,000 tonnes so far, with orders mainly from rebar producers.
Suppliers in Iskenderun offered billets at $545-555/t exw, with some sales reported at the higher end of that range.
Turkiye’s construction costs remain High
As per industry reports, in July 2024, Turkiye’s construction cost index increased by 46% y-o-y, driven by a 41% rise in building materials and a 58% surge in labour costs. M-o-m, the index grew by 2%, with building materials and labor costs up by 2% and 1.5%, respectively. Steel prices remained stable: local rebar at $580-605/t exw, wire rod at $590-610/t exw, and profiles at $610-635/t exw. The high inflation rate of 62% and a 24% depreciation of the Turkish lira, which weakened to TRY 32.92 added to construction cost pressures.
Outlook: Market sources anticipate a flat near-term price sentiment with limited potential for upward movement. A Turkish mill source mentioned that while no immediate changes are anticipated, the arrival of previously booked billets might result in a quieter October for scrap deals. Significant price adjustments could occur if rebar sales slow down.
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