Having slowed down their demand for scrap since mid-August, Turkish steel mills have shown even less demand for import scrap in recent weeks and have even been concluding limited short sea scrap purchases. With Turkish steel producers pulling out of the market due to their expectations of lower import scrap quotations, demand in the global scrap market has also declined. Buyers in several importing countries, including Turkey, are also reducing their domestic scrap purchasing prices, while they are offering lower firm bids in response to current offers given by foreign scrap suppliers.
Last week, an ex-US scrap deal in Turkey for HMS I/II 80:20 scrap was concluded at $350/mt CFR, declining to this price level from $355/mt CFR recorded in the ex-US deal heard in the previous week. Additionally, a short sea scrap deal in Turkey was concluded from Rostov last week for HMS I/II 90:10 scrap at $336/mt CFR Black Sea, while an ex-Romania A3 grade scrap deal was concluded at $320/mt CFR Marmara in the same period.
Despite the very slow demand seen in the local Turkish rebar market, domestic rebar prices in Turkey are moving up slightly due to the depreciation of the Turkish lira against the US dollar caused by developments in Northern Iraq. Following the Chinese authorities’ announcement of a suspension for some major construction and infrastructure projects during winter to improve air quality, it is observed that Chinese suppliers are focused on their finished steel export sales. Although Chinese suppliers’ finished steel export prices have declined somewhat, they are still not at international buyers’ targeted levels.
On the one hand, Turkish steel producers are expected to wait for their finished steel sales to improve before concluding any new import scrap transactions, while on the other hand it is expected that they will postpone their import scrap purchases until the SteelOrbis 2017 Fall Conference & 77th IREPAS Meeting to be held in Athens on September 24-26 in order to listen to developments and expectations regarding the market, including the problem of electrode supply which does not appear likely be resolved in the near future - and to evaluate the situation with their suppliers and customers.