Turkey: Imported scrap prices soar to all-time high on supply constraints from CIS

Considering the ongoing Russian-Ukraine trade tensions, prices of imported scrap to Turkey have soared to record highs. Additionally, supply became difficult through the Black Sea to exporters. However, limited deals were witnessed at increased offers.

Recent deals

• In a recently-concluded deal, around 23,000 tonnes (t) of HMS (80:20) was booked at $585/t CFR, 6,000 t of shredded and 6,000 t of bonus at $610/t CFR each. The Baltic-origin bulk cargo has been sold to a Mediterranean region-based steel mill.
• Before this, a US-origin bulk cargo was booked by a Turkish mill, sources informed SteelMint. The cargo, comprising HMS 1/2 (80:20), was booked by the Mediterranean region-based mill at $520/t CFR Turkey.

SteelMint’s assessment of US-origin HMS 1 & 2 (80:20) prices increased to a multi-year high of $585-590/t CFR Turkey. The prices are the highest since 2010, as per data maintained with SteelMint.

The sharp hike in raw material prices has resulted in a strong domestic market and increased prices for semis and finished steel products.

Market overview

• Domestic scrap prices up on improved demand: The country’s steelmakers continued to lift domestic scrap purchase prices due to strong demand from end-users, following the surge in imported scrap prices as well as in semis and finished steel products.
• Major mills lift local rebar prices: The consequences of Russia’s attack on Ukraine continue to raise Turkey’s domestic and export prices. ICDAS has increased its rebar offers further by $40/t w-o-w to $810/t exw-Biga and $821/t CFR Marmara. Meanwhile, another major mill, Kardemir, also increased rebar prices to $820/t exw-levels.
• Billet prices skyrocket in Turkey: Domestic billet prices continued to head northward. The scarcity in semi-finished products from CIS due to the panic market situation caused by the Russia-Ukraine war has made trade unpredictable. Local billet prices were set at $780-785/t exw, registering a sharp hike of $80-85/t w-o-w, said sources.
• Energy tariff revision indirect influence on steel sector: The nation continued to adjust its energy tariffs amid global tensions. While no direct changes were announced for the industrial users, the recent revision is expected to have an indirect influence on the steel industry. A lower rate was introduced for industrial users that consume less than 900 kWh per month – TRY 2.05/kWh ($0.15/kWh), adding that this regulation covers 91% of business subscribers, as per reports.
• Turkey’s ferrous scrap imports stable m-o-m in Jan: Turkey’s ferrous scrap imports remained largely stable at 2.46 mnt in Jan’22 vis-a-vis 2.49 mnt in Nov’21, as per SteelMint data. Ukraine was the top exporter to Turkey with 0.34 mnt in January, followed by USA and Russia with 0.31 mnt and 0.22 mnt, respectively. On a yearly basis, scrap imports saw a rise of 27% as against 1.93 mnt in Jan’21.

Outlook:  Market players believe imported scrap prices will rise further due to the growing geo-political tensions. The country has imported around 24.36 mnt, while imports from Russia and Ukraine were recorded at 1 mnt and 0.34 mnt respectively.