Turkish mills’ demand for import scrap is observed to be at very low levels, while they are currently exerting downward pressure on prices. The ex-Baltic deal concluded last week with HMS I/II 80:20 scrap at $307/mt CFR - $19/mt lower than the price in the previous transaction - caused an earthquake effect in Turkey’s import scrap market. Following this rapid and sharp fall in prices, Turkish mills as well as billet and rebar buyers have readjusted their price expectations in line with the most recent quotation level for HMS I/II 80:20 scrap at $307/mt CFR.
As Turkish mills are comfortable with their current scrap inventory levels owing to their many previous scrap bookings, scrap suppliers are also supported by their sales, with some even focusing on scrap collection in order to be able to ship their commitments in time. It is noteworthy that scrap collection prices in the European Union are still on the high side as a result of local scrap suppliers’ strategy of focusing on scrap collection. While no deep sea or short sea scrap offer is heard in the market currently, Turkish steel mills’ price ideas for short sea scrap are at around $300/mt CFR, though SteelOrbis has been informed that scrap suppliers are not ready to accept this level yet.
After reducing their scrap purchases, Turkish mills have prioritized their finished steel sales and are observed to be working to gain a share of the limited demand in the international markets. Although there is still demand, albeit slow, for Turkish billet and wire rod in the international markets, demand for Turkish rebar has decreased significantly. Under the current circumstances, Turkish steel producers are unlikely to start purchasing scrap before they see a recovery in their finished steel sales.