Earlier this week, Turkey’s import scrap prices were still giving off positive vibes, rising once again in an older deal from last week. The upward push in the local US scrap market was helping the positive sentiment in the market. On February 25, prices inched up slightly in relatively new deals done for March shipment, disclosed as having been done from the US and the Baltic region. Some sources believe that the positions of both suppliers and buyers regarding prices are currently balanced somewhat, while price expectations are mostly firm to slightly positive. Some players believed that the situation in Turkey’s rebar market may improve before Ramadan on the back of some restocking, which would also support scrap pricing.
When the mid-week came, deep sea scrap prices stabilized once again. The overall sentiment in the market was still positive amid the upward expectations in the EU and the US domestic markets. However, Turkish mills continued to report steel sales on the low side, with domestic rebar prices struggling to move up. Market sources reported that the sentiment in Europe has changed for the better. Expectations in the local European scrap market were not for stability or even a slight softening anymore. On the contrary, sources report that scrap prices in Italy and Germany are set to move up at least €5-10/mt in March. These upward expectations are supported by the strong sentiments in the US. A supplier of ex-US and ex-EU scrap to Turkey said on February 26, “We all see the mood in the supplier regions as positive, mainly due to the consecutive announcements by President Trump. But I also see that Turkish mills are not very happy with the current scrap prices, signaling their lack of sales, particularly for rebar.” A source at a major Turkish producer admitted that prices have some more room to increase, commenting, “We see the mood in the supplier regions. Not only scrap but steel prices in some regions are recovering sharply. So, a further increase in deep sea prices would not surprise me. Also, we are expecting premium grade availability to be lower from the US in the coming period, as their steel industry is very likely to increase their capacities due to the incoming tariffs.”
Despite the positive sentiment observed during most of the current week, as of yesterday, February 27, Turkey’s appetite for import scrap has slowed down, while prices have remained relatively stable. The upward support for prices has decreased as the number of buyers seeking deep sea cargoes has slowly declined in recent days. Market sources report that there was a higher number of buyers in the market earlier this week, while now Turkish mills are more inclined to wait and monitor the situation in the steel segment.
Today, February 28, an ex-Germany deal done by an Iskenderun-based producer has surfaced in the market with 22,000 mt of HMS I/II 80:20 scrap at $354/mt CFR, for March shipment. This information has not been confirmed by the buyer or the seller at the time of publication, though since the supplier is a new player in the Turkish market, this price is not considered indicative yet.
SteelOrbis observes that the current mood in the market is more one of caution among mills. Some Turkish producers are convinced that seasonal rebar demand will start in Turkey in March as usual, while others need more proof since recently domestic rebar prices are struggling to match the scrap price uptrend. “We decided that local rebar market will recover anyway and Ramadan will not have a big impact. In the end, the urban transformation projects in the Marmara region and the rebuilding of the earthquake-hit southern regions will need rebar,” a source at a major Turkish mill reported. Others do not agree, mentioning the high interest rates, adding keeping cash in banks is more profitable, especially for the small and medium-sized construction companies. “I would not invest money in construction at the current rates, so I believe rebar demand may remain slow after temporary demand from traders,” another scrap supplier commented. “We need to follow the developments from the US about tariffs, then we have to see what the EU and the Politburo will do,” another source added. Meanwhile, it is noteworthy that the recent deals done by Turkey have all consisted of tonnages in the range of 20,000-27,000 mt, lower than usual especially for ex-US cargoes. Some players believe US suppliers may be holding back due to their expectations of an increase in prices, and add this will mean the European scrap can find more support from the US in the coming days.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 0.63 percent week on week. The prices are now 5.89 percent higher month on month in the deep sea segment, with prices being in the range of $357-362.5/mt CFR.
March scrap pricing in the US Midwest and US East Coast is little changed from a week earlier this week as the market remains mostly sidelined awaiting further clarification from the Trump administration concerning the implementation of the threatened tariffs on imported steel.
March scrap pricing in the US Midwest is seen up a steady $30-40/gt ($30-41/mt) premium from February settled prices as inventories continue to be reported at low levels at both mills and suppliers. Recently, cold weather and equipment-related problems have impeded the processing and delivery of local scrap, market insiders told SteelOrbis.
“The talk is still up in the $30-40/gt range, possibly as high as $50/gt” one
A Midwest scrap supplier told SteelOrbis, “There’s not much dialogue in the markets this week because of tariff uncertainty, but it definitely looks up because scrap supply is still tight.”
And, as scrap supplies remain tight, uncertainty continues regarding future trade flows.
Data from the US Commerce Department indicates about 10 percent of US scrap consumption is met through imports of the material from Canada and Mexico, the US’ two largest trading partners. It is generally thought that the proposed 25 percent tariffs on Canada and Mexico will further trim these imports, with many expecting the two countries to retaliate against the US with their own tariffs. As a result, many US steel suppliers and distributors are reported to be stockpiling supply ahead of expected tariffs, causing prices in weekly spot markets to move sharply higher.
The local scrap markets in Europe have registered a relative stability this week. In Italy, scrap prices in the local market have remained stable for all categories except E3, which marked a €5/mt increase. Almost all players in the market believe there will be a further rise of €5-10/mt in March.
In Spain, scrap prices have risen by about €10/mt in the local market and are expected to rise by another €10/mt in March contracts.
The sentiment is similar in Germany, where there is already talk about a €10/mt rise in March, and, in fact, one important mill in northeast Germany has already closed some spot contracts for medium-sized scrap lots, raising its purchase prices by €5-8/mt. Collection prices to export yards are still in the range of €305-310/mt for HMS I/II 80:20, unchanged week on week.
The local scrap market in Poland, finally, has remained silent this week, with no movement reported. Local collection prices to export yards have also remained stable week on week, in the range of €310-320/mt DAP for HMS I/II 80:20 scrap.
Over the past week, Taiwan’s import scrap market has remained stable once again. Market sources report that US scrap prices are tending to move up further, while Japanese suppliers are evaluating the situation as their local currency is losing strength.
Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have remained mostly at $315/mt CFR. Despite the stability in offers, actual deal prices have increased slightly to $313-315/mt this week. Offers shared for Japanese H1/2 (50:50) scrap bulk have almost disappeared this week. Market sources report that the depreciation of the Japanese yen is the main reason for this. No bulk deals have been done from Japan this week.
Vietnam’s import scrap prices have moved up this week, while buyers have remained cautious amid the rising trend. The reciprocal tariffs planned by the US are expected to disrupt export demand across the Asia-Pacific (APAC) region, according to a report released by Moody’s Ratings on Thursday, February 27. According to the Vietnam Steel Association (VSA), the US is currently the third largest export market for Vietnamese steel, accounting for 13 percent of its total export turnover, following the ASEAN region and the EU. However, with several countries which faced lower tariff rates in the US in the past now facing the same 25 percent tariff, this may help Vietnamese mills to compete in the US market.
Over the past week, offers for Japanese H2 scrap to Vietnam have to $325-330/mt CFR. Ex-US bulk HMS I/II 80:20 scrap offers to Vietnam have also moved up to $360-365/mt CFR.
Tokyo Bay FAS-based prices for H2 grade scrap have also moved up over the past two weeks, by JPY 500/mt to JPY 40,000/mt ($267/mt), with a $10/mt increase in dollar-based prices. This level shows that FOB prices are now at JPY 41,000/mt ($273/mt) for this grade.