Turkish imported scrap prices have continued to rise and are trading at over six-years high on availability concerns. Global suppliers have left buyers with no option, as they have to book scarp cargoes at high offers on increased demand from the end-users.
On the other hand, major supplying countries like USA are holding back and are even targeting $400/t CFR level in the near term, whereas the country has strong domestic scrap consumption and the absence of US origin material into Turkey has also tightened shredded scrap supply.
SteelMint’s assessment for USA origin HMS 1&2 (80:20) stands at $375-380/t CFR Turkey, up by $30/t on a weekly basis.
Recent Turkish Deals-
Market highlights-
- Increasing steel output – Robust domestic steel market sentiments have supported scrap price hike. According to WSA, Turkish crude steel output increased by 4% y-o-y to 29.14 mn t during Jan-Oct’20.
- Improved steel consumption lowering Turkish steel exports – During 9M CY’20, Turkish finished steel consumption increased by 15% y-o-y. Turkish flat steel exports have come down by 15% m-o-m to 0.56 mn t in Oct ’20. Similarly, long steel exports have fallen by 4% m-o-m to 0.79 mn t in Oct’20.
- Tighter availability lowers Turkish scrap import volumes Turkey– World’s largest ferrous scrap importer, witnessed a 13% fall in Oct’20 imports amid tighter availability of scrap from EU & US. The country has imported 1.85 mn t scrap in Oct’20 as compared to 2.14 mn t was recorded in Sep’20. However, on a yearly basis, scrap imports have increased by 64% as compared to Oct’19. Major suppliers were the US, Netherland, and Russia.
- Hike in global iron ore prices – Chinese spot iron ore fines (Fe 62%) increased significantly by around $20/t on a weekly basis and stood at $ 158.25/t CFR China today against $137.8/t a week before. Prices already hit nine years high yesterday. On a daily basis spot index increased around $7.5/t today against $151.25/t yesterday. Prices are hovering at high levels backed by strong demand and supply constraints.
Outlook – Imported scrap prices are likely to increase further in the coming days owing to logistical constraints and availability concerns
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