Turkey’s import scrap market continues to move down due to increasing pressure on prices and scrap suppliers. Following the sharp decline in the US origin scrap prices yesterday, November 27, another ex-US scrap transaction has been closed at an even lower level.
The ex-US booking in question was closed by a Marmara-based producer for HMS I/II 80:20 scrap at $342/mt CFR, with higher grades at a $20/mt premium. Market sources report that this cargo will be shipped in December. This price is $3/mt lower than the previous level fixed in an actual deal.
Two more rumours of ex-EU and ex-Baltic deals closed at $332/mt CFR and $335/mt CFR were denied by the seller and buyer.
Market sources mostly agree that there is currently significant downward pressure on deep sea scrap prices, while most players believe that December will not be very different from November. “There are too many cargoes available for December and January shipments, more than we anticipated earlier this month. There is not sufficient demand received from producers for January shipments,” a seller said. “Turkey has not bought low tonnages over the past two months. I believe a total of 60-65 deep sea cargoes were bought by Turkey in this period. There are also previous billet and slab orders. Turkish producers are in no rush,” a source added. The same source pointed to BOF-based prices for iron ore and coal, saying that EAFs would reach equilibrium with BOFs when HMS I/II 80:20 scrap prices decline towards $320/mt CFR Turkey. This is not the only source voicing the idea of a possible decline towards $320/mt CFR. In both the seller and buyer segments, negative sentiment is dominating. Domestic fundamentals in the scrap supplying regions are also negative, market sources agree. Expectations for the local US scrap market have changed from sideways to soft sideways, The European domestic scrap market is set to decline in December amid a lack of demand. The lack of finished steel sales is one of the main topics of conversations both in the EU and Turkey. The appreciating US dollar is also exerting pressure on all commodity prices. Some Turkish long steel producers report that nothing is happening on the sales side. “Our phones are not ringing despite the declining rebar prices,” a source at a major mill reported. Meanwhile, today, Turkish producer Kardemir decided to close its domestic billet sales, having traded around 70,000 mt at $520/mt ex-works. However, a few market players recalled some previous years when the traditional price increases for December shipments were not seen, adding that prices moved up in January to compensate for the decreases recorded at the end of those years. A source said, “Towards the end of the year, each player is trying to better their financial books. When 2025 begins, it will not be the case and sellers will not continue accepting losses. There should be a bottom of prices, and it all depends on collection costs. Lower CFR Turkey prices will cause problems, particularly for European sellers.”
