Following the political developments in Turkey which started on March 19, players in the Turkish steel and scrap markets are evaluating the economic impact of the recent events. Earlier this week, an ex-US scrap deal from late last week was shared with the market and raised the question of a possible peak for prices. Most market players believe that deep sea scrap prices will now remain stable as players monitor the situation closely, still trying to make accurate forecasts as events move rapidly.
The collection prices of European export yards are still at €310/mt DAP, while in some rare cases reaching €315/mt DAP on the upper end. SteelOrbis agrees that the collection costs in the EU are not allowing much room for exporters. While bonus scrap collection prices at EU-based export yards are at €330/mt DAP, locally the price for this grade is now at €364/mt delivered, leading some German sub-collectors to wait before concluding sales to export yards to evaluate the alternatives.
One of the main topics of the conversation in the market since the beginning of the week is the Turkish lira-US dollar exchange rate, which directly impacts trading. On March 25, Turkey’s President Erdoğan stated after a cabinet meeting, “Our Ministry of Treasury and Finance, our Central Bank, and all relevant institutions are working in full coordination with a strong team spirit and our firm support, taking every necessary step - both already taken and ongoing.” On March 19, the Turkish lira had lost approximately 12 percent of its value and momentarily depreciated to 42.0 against the US dollar. While the Turkish lira regained some strength on the same day, market sources believe the lira remains vulnerable under the current conditions. Today, March 28, the Turkish lira stands at 38.008 to the dollar at 16:36 Istanbul time. Meanwhile, according to Bloomberg HT, “In the week of March 21, commercial loan rates increased by 2.8 percentage points in just one week, reaching 58 percent.” Loan rates were widely discussed in the market this week, with it being pointed out that the typical restocking activities are not more costly amid higher rates. Hence, traders are also waiting until after the holiday. Turkey’s private sector will be off for the holiday, returning to work on Wednesday, April 2. However, President Erdoğan has announced that on April 2, 3, and 4, public employees will be considered to be on administrative leave.
At the end of the week, all players were almost sure that deep sea scrap prices would remain stable in the coming week. The soft trend expected in the local US scrap market is a factor in the forecasts, while the lack of a sustained recovery in the EU steel sector is another. The low scrap availability on both sides of the Atlantic Ocean provides support for prices, giving hope to suppliers that prices may hold firm in the coming days. However, the weather conditions on both sides of the Atlantic will be better in April, and many sources report that availability is set to increase and may give some room for a price correction in April. With Turkey having almost completed its deep sea scrap purchases for shipment in April, some producers are in no rush to buy cargoes for May shipments. Also, planned maintenance works are scheduled for a couple of Turkish mills.
A final factor affecting the Turkish market are energy prices. Some news agencies in Turkey report that the government is evaluating a possible 25 percent rise in electricity prices starting from April 1. Energy and natural resources minister Alparslan Bayraktar stated on March 26, "There may be a hike or not. We will look into it and evaluate it."
Late today, March 28, an ex-US scrap deal was shared with the market done by a Marmara-based producer for HMS I/II 90:10 scrap at $387.5/mt CFR and P&S grade scrap at $402.5/mt CFR. Market sources report that this information indicates $382.5/mt CFR for the benchmark HMS I/II 80:20 scrap.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 0.2 percent week on week. The prices are now 5.35 percent higher month on month in the deep sea segment, with prices being in the range of $375-382.5/mt CFR.
The expectation among US market insiders for April scrap pricing seems to be one of soft sideways to as much as $40/gt lower, off sharply from recent flat expectations, as supply at mills and local scrapyards is reported to be more than adequate to meet current demand levels, following the recent first quarter price increases and better weather as spring temperatures arrive across much of the US, market insiders told SteelOrbis this week.
“Scrap is seen stable to down,” said one Midwest scrap insider, adding, “Many people are waiting to see what the mills will do next week on April 2.”
April 2 begins the expected start of reciprocal tariffs by the US Trump administration. The tit-for-tat tariffs, as part of the US president’s plan to be “more flexible,” is now likely to target the top 15 countries that currently maintain the highest trade imbalance with the US.
The local scrap market in Italy seems to have found some sort of balance during the past week. Local scrap purchase prices have remained mostly stable and inflows have been regular, although the market remains characterized by a widespread shortage of material.
Although most operators expect April to be a stable month, both in view of the holidays and of the impossibility of further increases in scrap prices, some believe that there is still room for adjustments of €5-10/mt. One producer confirmed that they will stop production between April 19 and May 4, while another reported that they will only stop on non-working days.
The German economy and the local scrap segment have been showing signs of a slight recovery towards the end of March. According to a German source, although scrap is still scarce in the local market, availability is slowly increasing, and demand for the material has improved both in the local market and in the export market, especially towards Italy. According to the latest data provided by the BDSV, E1 scrap prices stood at an average of €285.1/mt, rising by €12.9/mt month-on-month. Finally, local collection prices for export yards are at €310-315/mt DAP for HMS I/II 80:20 and around €330/mt DAP for bonus scrap.
The leading Japanese EAF-based steel producer Tokyo Steel has increased its domestic scrap procurement prices only for its Utsunomiya plant, announcing a rise of JPY 1,000/mt. Market sources report that sentiment in the local Japanese scrap market is positive for now.
Despite the adjustment in question, Tokyo Steel’s general range for H2 grade scrap prices has remained stable at JPY 40,000-43,000/mt ($266-286/mt) depending on the mill.
Over the past week, Taiwan’s import scrap prices have softened slightly. Steel trade, particularly in the rebar segment, remains quiet in Taiwan, similar to the previous weeks. Market sources report that all players were waiting for electricity prices to be hiked by the government. The initial expectations were for the hike in electricity prices to be made now, or to be postponed to July. Following a government announcement earlier today, Reuters reported, “Taiwan will not raise electricity prices for now given global uncertainty over the impact of trade tariffs and geopolitical risks, but the government will seek parliamentary approval for funding to stem nearly $13 billion in losses for the state-run power firm.”
Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have are at $315-320/mt, with actual deal prices declining to $315/mt CFR.
Offers shared for Japanese H1/2 (50:50) scrap bulk have been limited this week, with the offer prices at around $335/mt CFR
Vietnam’s interest in import scrap purchases has recovered recently amid improved construction activities and the government’s efforts to support the economy. The Vietnamese government has announced a proposal to continue a two percent reduction in the value-added tax (VAT) starting July 1, 2025, until December 31, 2026.
Over the past week, offers for Japanese H2 scrap to Vietnam have remained stable over the past week at $335-345/mt CFR. Ex-US bulk HMS I/II 80:20 scrap offers to Vietnam are now at $370-375/mt CFR.
Tokyo Bay FAS-based prices for H2 grade scrap are currently at JPY 42,000/mt ($278/mt), showing that FOB prices are now at JPY 43,000/mt ($285/mt) for this grade.