It was observed last week that import scrap prices in Turkey had continued to move up in transactions. An ex-UK HMS I/II 80:20 scrap sale to Turkey was concluded at $332/mt CFR, while the same supplier concluded an ex-US HMS I/II 80:20 scrap deal to Turkey later in the same week at the higher price level of $341/mt CFR. As a result, the average level of import scrap prices in Turkey last week was $336.5/mt CFR. On the first working day of the current week, an ex-Europe scrap deal was also concluded at higher price levels. An import scrap supplier, which concluded a HMS I/II 75:25 scrap transaction to Turkey last week at $327/mt CFR, has concluded another sale to the same destination for the same grade at around $331/mt CFR.
Having been forced to accept higher price levels for import scrap purchases, Turkish steel mills have reflected this rise in their rebar export offers, increasing them to $515/mt FOB on actual weight basis. However, despite ongoing price inquiries from international buyers, the current prices levels of Turkish rebar are considered to be very high and firm bids by buyers are at far lower levels. Turkish steelmakers have been experiencing difficulties in terms of large-tonnage rebar sales for a long time now, while they have only been making sales to markets to which they traditionally conclude sales of small tonnage, such as Latin America, Africa, the Middle East and Israel. As a result, Turkish rebar export price levels at $515/mt FOB for sales of large tonnages are not expected to gain acceptance from buyers. On the other hand, if Turkish mills accept lower firm bids, the already reduced margin between scrap and rebar prices will narrow further.
Under these circumstances, Turkish steel producers are expected to exert pressure on import scrap quotations. If they fail to achieve lower import scrap prices, they are expected at least to try to assure the stability of prices. Additionally, it is believed that Turkish mills will find it difficult to accept higher levels than the current price range at $327-341/mt CFR for HMS I/II 80:20 scrap.