Turkiye: Lower bids weigh on imported scrap prices

Imported scrap trade in Turkey remained slow throughout the week with limited enquiries while a few deals were heard to have been concluded. Most mills have taken a step back to understand the market situation as demand from the downstream sector is yet to improve. Meanwhile, steel producers are mostly focused on finished steel sales, while suppliers are trying to avoid giving further discounts.

SteelMint’s price assessment for USA-origin HMS 1&2 (80:20) is at $378/t CFR basis, down considerably by over $40/t w-o-w.

In a recent deal, a cargo containing 33,000 t of HMS (80:20) and 7,000 t of PNS of EU-origin was booked at an average price of $395/t CFR Turkey. The material was booked by an Aegean region-based steel mill.

Market overview-

• Lira largely stable against the dollar: The lira was falling against the dollar since the last couple of weeks. However, this week, it remained stable at 17.32 compared to 17.25 a week ago.
• Domestic scrap prices down: Some Turkish steelmakers have lowered domestic scrap prices amid sluggishness in the imported scrap market and a decline in local finished and semi-finished steel prices. Mills announced a price cut of up to TRY 400/t for domestic scrap purchase.
• Billet market dull: Negative sentiments continued to slow down trading activity in the semi-finished steel market this week. Suppliers also preferred to wait for a clear picture.
• Domestic rebar prices fall sharply: Turkish steelmakers have cut domestic rebar prices amid unfavourable market conditions. The country’s long steel producer ICDAS decreased its domestic rebar prices by TRY 850/t to TRY 14,850/t exw and TRY 15,030/t CFR, respectively. However, market participants believe that the company may offer discounts on its official prices if firm bids are seen.
• Turkish auto production up in May: Turkish auto sector showed a strong growth in May, helping to partially regain the previous losses. Total auto production was recorded at 103.984 units, up by 25.5% m-o-m. The production in the first five months of the year still failed to exceed last year’s volumes. Total automotive output shrunk to 513,887 units in the period, down by 3.5% over January-May 2021, according to the Turkish Automotive Manufacturers’ Association (OSD).

Outlook: Scrap prices are under pressure due to muted trading activity in finished and semi-finished steel markets. Prices are likely to drop further in the short tem.