Turkey: Mills postpone fresh bookings on currency depreciation

Turkey’s imported scrap market was mostly quiet this week and buyers postponed fresh bookings after a couple of bulk bookings were recorded last week. Market sentiments were bearish due to lesser demand from end-users while imported scrap prices have been downtrending since the last week of April. Since then, prices have fallen by a significant over-$210/t.

Furthermore, June also started with a slight decline in offers as prices remained under pressure due to weak domestic market sentiments. Steel mills and buyers continued to push for higher discounts due to unsatisfactory support from the downstream sector. Additionally, a sharp hike in Turkey’s power tariffs is another prominent factor that pushed back buyers.

Market overview 

• Lira depreciates further against dollar: The lira continues to deepen against the dollar. It is trading at 17.25 against the dollar compared to 16.49 a week ago.
• Lower billet prices may increase trade: The downtrend in billet prices deepened this week in the domestic billets market amid lack of support from finished steel consumers and negative sentiment in the scrap market. However, lower billet prices managed to boost business activity. Customers shortly accepted the mentioned prices and booked semi-finished in just a few hours.
• Mills adjust rebar offers: Due to a sharp devaluation of the national currency and negative sentiments in the scrap market. Turkey’s steel producer ICDAS sharply increased its local rebar prices to TRY 15,700/t exw-Biga and TRY 15,880/t CFR Marmara.
• Ferrous scrap imports up 5% m-o-m in April: Turkey, the largest purchaser of ferrous scrap, noticed a slight rise of 4.5% in imports of the material at 2.11 million tonnes (mnt) in April 2022 vis-a-vis 2.02 mnt in the previous month, as per customs data maintained with SteelMint. The United Kingdom and the Netherlands hold the position of top exporters of scrap to Turkey with 0.27 mnt each in April 2022 against 0.08 and 0.17 mnt a month ago.

The strong domestic and overseas markets of semis and finished steel products increased the shipments of scrap.

Outlook: Mills postponed fresh bookings due to negative market sentiments and the currency depreciation. They are waiting for clear directions before opting for the next round of bookings.