Turkey: Imported scrap prices dip to four-month low, limited deals heard

Turkey’s imported scrap buyers booked a few cargoes this week, giving indications of increased activity. The scrap market is under pressure due to a steep downtrend in domestic and overseas rebar and semi-finished steel markets. Prices have dipped to four-month lows.

Some market players believe that after the gap of the Eid holidays the offers have come down. Thus, mills have a chance to clinch deals.

Recent deals

• An Iskenderun-based company booked a short-sea scrap cargo of 5,000 tonnes (t) of HMS 1&2 (80:20) at $440/t CFR from a French supplier.
• Before this, another deal was concluded for Europe-origin cargo of 7,000 t of HMS 1&2 (80:20) at $465/t. Also, 10,000 t of shredded and 11,000 t of bonus were booked at $485/t CFR each.

SteelMint’s assessment of US-origin HMS 1&2 (80:20) is now at $470/t CFR levels, down by a further $20/t w-o-w. Prices are hovering at around four–month lows since January-end.

The negotiation process remained slow for imported scrap due to weak demand coupled with volatility in the national currency.

Currently, the national currency, lira, fell to 15.98 against 15.30 recorded a week ago.

Market overview

• Domestic scrap prices drop further: The Turkish domestic scrap market sees further price drop, being under pressure due to weak finished and semi-finished demand. Also, there is a downward pressure on the imported scrap market. Hence, steelmakers have adjusted and cut their domestic scrap purchase prices further downwards by TRY 220-600/t. In the absence of imported scrap trade, mills’ intention to push prices down is also negatively impacting the domestic market.
•  Billet prices tumble: The domestic billet market continued sliding this week. Lack of support from the finished steel market and negative scrap market sentiments added pressure to the semi-finished segment.
•  Rebar activity slows down: Domestic rebar prices are going down sharply due to a dramatic fall in imported scrap prices as well as the absence of demand from both domestic and overseas buyers. Offers for domestic rebar from most of the steel mills have declined sharply by over $90/t since last week. Turkey’s long steel producer ICDAS has kept offers at $780/t exw-Biga and $791/t CFR Marmara. A further decline is expected as per market sources. Buying interest in the domestic and overseas rebar segment is still modest despite the price plunge this week.

Outlook: The overseas market is waiting for the next round of booking for July shipments to get a clearer price direction.