Turkey’s ex-Baltic scrap prices have maintained their upward trend, though slowing somewhat. The positive sentiment surrounding Turkey’s deep sea scrap market earlier this month due to the expectations of a recovery in production rates across the EU and the US has not been met with support from the end-user side. Despite the tariff risks for steel imports into the US, market sources report that a rebound in steel demand is not yet seen in the US. The same can be said for the EU where a recovery is yet to be seen in the finished steel market. Turkey’s long steel demand and prices are also failing to provide enough support for higher scrap prices.
Under the current conditions, an Izmir-based steel producer is reported to have concluded a deal from Finland with the benchmark HMS I/II 80:20 scrap price standing at $374.5/mt CFR, recording a $3/mt rise for this grade. This deal has not been confirmed by the buyer or the seller at the time of publication but is largely believed to have been done. Therefore, SteelOrbis has revised its ex-Baltic HMS I/II 80:20 scrap price to $374.5/mt CFR, with other regions following. Ex-US scrap prices have been revised to $374-375/mt CFR, while ex-EU scrap now stands at $368-370/mt CFR.
Collection prices at EU-based export yards have declined to €300/mt DAP this week, dropping by €5-10/mt as compared to the levels recorded earlier this month. When March started, market sources informed SteelOrbis that, if EU-based steel producers wanted to compete with exporters, they would need to increase their procurement prices by €20/mt. Due to the recent changes, the domestic and export markets in the EU seem to be balanced. The euro-US dollar exchange rate has been making things harder for European scrap suppliers for weeks now, creating additional costs for sellers. Market sources report that scrap flow in the EU is still on the low side, supporting a price increase in the region, though whether steel demand will support this movement or not is open to question. A source at a major scrap supplier reported that US-based export yards are struggling to find the volumes they need. “The more attractive prices in the local US scrap market have led sub-collectors to send their scrap to domestic mills, and now exporters are forced to compete with them to change the destination of scrap flow,” the source added. Despite the need of sellers for higher scrap prices, the recent rises are not accompanied by higher demand from steel buyers. The local Turkish rebar market is struggling to achieve higher prices for the second week. Turkish rebar export prices vary at $570-585/mt FOB for April shipments, versus $565-570/mt FOB last week. Although official prices are moving up, an additional discount is still applicable for serious buyers. In the local Turkish rebar market, official offers and workable prices have settled at $570-590/mt ex-works depending on the region, up by $10/mt from a week ago. There are still discounted deals closed at around $565/mt ex-works, SteelOrbis hears. Turkey remains moderately active in the import billet segment, mainly due to high captive billet production costs, while the offer levels from abroad have improved slightly. Still, while the prices are quite workable, Turkey’s demand is less than expected due to uncertainty in longs export sales, market sources indicate. According to market information, a Turkish steel producer based in the northern part of the country has booked a full cargo of ex-Malaysia billet at $493/mt CFR for April shipment. Some demand has also been reported from an Iskenderun region-based re-roller, while the offers received varied at $492-495/mt CFR.
The rapid changes observed in international trading are a challenge for all players, causing a slowdown in the uptrend observed in all segments. Protectionist announcements have been made, some tariffs have been postponed, some reciprocal taxes have been canceled in just hours and others are here to stay. President Trump imposed 25 percent tariffs on all steel and aluminum imported into the US effective as of Wednesday, March 12. The European Commission has announced swift countermeasures against the US decision. Starting from April 1, the EU will reinstate its 2018 trade measures targeting US goods worth €2.8 billion and its 2020 trade measures targeting US goods worth €3.6 billion. Starting from today, March 13, Canada will apply 25 percent reciprocal tariffs on several steel product imports from the US worth $12.6 billion including hot rolled coils (HRC), cold rolled coils (CRC), coated steels, stainless steels, alloy steels, grain-oriented silicon steel, rebars, wire rods, angles, shapes, sections, wires, steel tubes and pipes, and hollow sections. Joachim Nagel, president of Germany’s Bundesbank, said that German economy may enter recession due to the US custom duties. The UK-based trade association UK Steel has stated that the US’ 25 percent tariffs on steel and steel derivative products that came into effect yesterday will have hugely damaging consequences for UK suppliers and their customers in the US especially in highly challenging market conditions including global overcapacity and oversupply, high energy costs, and weak demand. Assofermet, the association representing Italian distributors of scrap, raw materials and steel products, highlights the risk of a "domino effect" with possible repercussions mentioned in SteelOrbis’ report published yesterday.
Another note regarding energy prices is about Turkey’s exemption from US sanctions on Russia-based Gazprombank which ends on March 20. Turkey uses Gazprombank for payments in return of its natural gas imports. According to Bloomberg, the Turkish authorities say that the continuation of the exemption is a necessity for Turkey. Turkey’s finance minister, Mehmet Şimşek, is expected to talk with his US counterpart Scott Bessent on this topic.