Although demand in the local Turkish finished steel market has been slowing down lately, sentiment in Turkey’s import scrap market is currently firm.
Most scrap sellers report that there is not enough scrap flow to yards, and collection prices are not attractive for most sub-collectors, while the cold weather conditions are becoming more and more disruptive, beginning with the Baltic region, and most players are getting ready for the holiday season. “I think deep sea scrap prices will remain in the range of $380-390/mt CFR even though Turkish mills are showing resistance,” a supplier commented, adding, “I agree these levels are high for them if we consider their rebar sales, but there is not sufficient scrap availability to give some room to sellers.” Another supplier seconded this idea, saying, “There are alternative markets for European scrap suppliers. If Turkey does not buy, we can focus on them.” SteelOrbis hears that there are still some Turkish mills in the market seeking cargoes to be shipped in the first half of January and, contrary to last week, there are only a few offers from deep sea scrap sellers this week. “I can count around four offers, mainly from the EU, but the delivery terms of some of the offers are long. There are no stressed sellers in the market right now,” one reported. Amid the appreciating euro and pound, the collection prices in the EU are also sharpening, while some sources think restocking will start in the EU after the holiday season. According to market sources, Turkey needs 10-12 deep sea scrap cargoes for January shipment. Meanwhile, a decrease is considered possible in the short sea segment though, because the financial structure of the short sea sellers is more compromised than that of the deep sea scrap sellers.
On the other hand, local Turkish rebar market is the only thing that provides some support for scrap quotations. Following the livelier demand observed from traders for rebar as prices were increasing, demand is now sluggish at best. An Izmir-based producer received some demand from traders earlier this week at $660/mt ex-works, but these bids have disappeared today, December 15. Traders are maintaining a cautious stance and will wait for next week to see whether mills will keep their prices stable or not. A trader reported inventory levels of rebar in the spot market have shrunk as traders lowered their sales prices, and most need to replenish some stocks. “If Turkish mills do not cut their domestic rebar prices at the beginning of the next week, I think they will find some buyers willing to purchase rebar.” Another trader disagreed stating, “I think demand in the spot rebar market will not support the current levels. A slightly downward adjustment is possible towards the end of this month. We observe a slowdown from the construction sites in terms of rebar demand, which is now below average.” It is obvious that Turkish mills’ capacity utilization rates are still on the low side, and they do not need so much to conclude export sales. “However, the Asian market is rising. If it continues like this, in the longer term I think Turkey may find opportunities to get back to those markets it lost,” one market player commented.
