As a result of consecutive negative developments seen since the beginning of the current year, Turkish steel mills are in no rush to conclude new scrap deals, and so the import scrap market in Turkey is currently quiet. Following Turkey's cancelation of the import duty on rebar on the first day of 2018, buyers have been forced to accept high electrode prices due to tighter electrode supply, while Chinese steel prices have mostly followed a downward trend in this period. As a result, while in December Turkish steel mills in December were willing to conclude import scrap transactions, they are no longer eager to conclude deals in January. Having been at $385/mt right after the New Year holiday, import HMS I/II 80:20 scrap offers to Turkey have declined below $370/mt CFR today, January 16, amid the weakness of Turkish mills’ demand as well as the downward pressure on prices exerted by them. Although ex-Baltic HMS I/II 80:20 scrap offers to Turkey were at $375-378/mt CFR last week with buyers’ firm bids at $371-372/mt CFR, offers for the same scrap grade given to Turkey today are at $370/mt CFR or lower, while Turkish buyers’ price ideas are currently at $360-365/mt CFR.
While scrap collection prices have increased in January, European scrap suppliers’ costs have also moved up due to the ongoing appreciation of the euro against the US dollar, with one euro now exceeding $1.22. These developments make it harder for European scrap suppliers to meet Turkish steel producers’ price ideas. Meanwhile, ex-US scrap quotations are still far higher than the Turkish mills’ expectations. Under these circumstances, scrap suppliers in the Baltic region are believed to be the suppliers who are closest to meeting Turkish steelmakers’ price expectations.
Turkish steel mills are observed to be very unwilling to conclude new import scrap bookings as none of them wants to be the first mill to make a purchase, while the lack of a revival in demand in the local Turkish rebar market, as well as the production cuts caused by the electrode and refractory shortages, also cause Turkish mills to postpone their import scrap purchases. In the meantime, many scrap suppliers, which are actually ready to conclude sales, are reluctant to give too much publicity to their offer price levels. All these factors have caused activity in the import scrap market in Turkey to remain quiet.