Turkiye: Imported scrap trade muted on dull finished steel demand

Turkiye’s import scrap market was mostly silent with limited deals reported towards weekend. Steel mills remained inactive as they remained busy making negotiations with scrap suppliers. Steel producers opted to wait and watch due to lower-than-average finished steel sales in the domestic and overseas markets.

In recent deal, a western Marmara-based steel mill has booked European mixed bulk cargo. The cargo comprised of HMS 1&2 (80:20) at $398/t and shredded at $413/t CFR basis. The shipment is schedule for October.

SteelMint’s assessment for US-origin HMS 1&2 (80:20) stood at $398-400/t CFR, inching down on the week.

Meanwhile, domestic steel mills focussed majorly on the finished steel market to improve domestic sales. The situation remains unfavourable as scrap prices are high but sales have dried up. Some producers intend to stop production for maintenance.

Domestic market situation

• Lira inches down against the dollar: The Turkish currency, Lira, fell slightly this week. The currency is now being traded at 18.21.
• Domestic rebar prices to decline: Despite firm imported scrap prices and high production costs, Turkish steelmakers have started to adjust their rebar offers on the back of limited buying interest from local customers. However, major steel producer ICDAS has kept its rebar prices unchanged over the last few weeks at $670/t exw Biga and $681/t CFR Marmara. However, market participants believe that the company may lower its prices soon. In contrast, other majors like Kardemir have announced new rebar prices for the domestic market.

However, weak demand in the finished steel market is the reason why sellers are unable to sell enough volumes even at lower prices.

• Billet market under pressure: Trade activities in the domestic billet market remained muted this week. High imported scrap prices and slow finished steel market movements kept the market subdued. As a result, local mills are staring at production stoppages.

Outlook: The imported scrap market is likely to remain dull in the near term on subdued finished steel demand. On the other hand, other leading scrap-buying countries are waiting for fresh deals in order to get a clearer market direction. However, industry participants believe that the market remains unpredictable for the time being.