The Turkish import
scrap market has started the New Year with an important development, which is also very significant for the global steel market. In 2014,
China, ranked as number one steel producer in the world with output of 750 million mt in the first 11 months of the year, had increased its focus on environmental measures, while considering steps to limit steel
production in the country. In early November, the Chinese government shut down some steel mills in order to lessen air pollution during and after the Asia-Pacific Economic Cooperation (APEC) conference in Beijing. Also, the government began discussing the removal of the 13 percent export tax rebate on boron-added steel products on the grounds that
production of these products causes pollution. Subsequently, on New Year's Eve, the Chinese government as expected announced the removal of the rebate for the given products, with this announcement being important for Turkish rebar exporters.
After the Chinese government's announcement, Turkish steel producers have an opportunity to be more competitive in the export markets where Chinese producers have been present for quite a while now with low finished steel offers. It is expected that Turkish producers' finished steel exports to these markets will increase and that their
scrap demand will rise accordingly, thereby supporting import
scrap prices in
Turkey. The latest ex-US deal to
Turkey for HMS I/II 80:20
scrap was concluded at $319.5/mt CFR. While trading activity in the US
scrap market remains very quiet as most
scrap suppliers are still on holiday, it is expected that they will revise their export offers upwards with the support of improved trading activity in the market after the holiday period. It is thought that the price trend in the Turkish import
scrap market in the short term will be determined by the success of Turkish steelmakers in the export markets in competing with Chinese producers.