Turkey: Imported scrap prices climb to eight years high in recent deals

Turkish steelmakers kept the global scrap price in upward trend successfully with prices climbing to eight-years high. Despite the hike in imported scrap price, Turkish steelmakers are actively booked numerous bulk cargoes throughout the week for the Feb’21 shipments on the influence of increased domestic demand. SteelMint’s assessment for USA origin HMS 1&2 (80:20) stands at $438/t CFR Turkey, up by $55/t on w-o-w.

Recent Turkish Deals-

On the back of a hike in imported scrap price, finished steel prices also gaining pace in an upwards trend. The rise was due to Turkish steel mills’ continuous steel sales and the positive outlook of the overseas steel market and manufacturing industry.

Turkish market highlights-

• Hike in automotive production– Production in Turkey’s automotive sector climbed 5.4% y-o-y in Nov’20 to 143,264 vehicles, highlighted by Automotive Manufacturers Association (OSD).
• Turkish ferrous scrap imports fall by 13% in Oct’20 – Turkish ferrous scrap imports witnessed a 13% fall in Oct’20, while tight availability of scrap from EU & US kept the buyer under pressure to think twice before place an order at high offers. The country has imported 1.85 mn t scrap in Oct’20 as compared to 2.14 mn t was recorded in Sep’20, as per data maintained with SteelMint. Major suppliers were the USA at 0.34 mn t (down by 31% in Oct’20).
• Demand for billet imports may increase- Driven by a sustainable long steel demand both domestically and overseas, Turkish mills continued to express strong interest in imported billet purchases. The country has imported almost 0.29 mn t of billet in Oct’20, signifying a 38% hike y-o-y in contrast with 0.21 mn t imports was recorded in same month a year ago, as per customs data maintained with SteelMint.
• Uptrend continues in China’s benchmark iron ore futures – Dalian iron ore futures today continued their uptrend on the back of a strong demand outlook for 2021. Dalian’s most traded May ’21 iron ore futures ended up closing at RMB 1,026/t. In Singapore Exchange, iron ore futures Jan ’21 contract increased by $1.82 to $156.76/t. SHFE rebar futures noted a rise of RMB 27 while HRC futures increased by RMB 28 on a d-o-d basis.

Outlook– Many market participants remain optimistic and expect that there is room for more scrap bookings, while prices may go up by $15-20 in near term.