It is observed that Turkish steel mills’ demand for import scrap is still at low levels. Although some news sources believe that import scrap prices for Turkey have bottomed out and have started to move up, no actual upward movement has yet been seen. This interpretation of an uptrend is based on the ex-Europe scrap deal concluded in Turkey for a cargo consisting of 4,000 mt of HMS I/II 80:20 scrap and 1,000 mt of bonus grade scrap, with HMS I/II 80:20 scrap priced at $290/mt CFR, as well as on the ex-Denmark scrap deal concluded in Turkey at the average price level of $310/mt CFR. However, the lower-priced transaction from Denmark was concluded at the beginning of last week, while the ex-Europe scrap deal was concluded in the second half of last week. Saying that prices have moved up based on these scrap bookings is misleading. Considering all the import scrap transactions concluded in Turkey last week, it is clear that import prices have continued their downward trend throughout the week.
In the current week, Turkish steel producers’ demand is still seen to be at low levels, with some steelmakers making it known that they intend to wait to gain a clearer picture of China’s strategy after its long holiday. While demand in the local Turkish rebar market is still weak, domestic rebar prices in Turkey’s Iskenderun region have fallen sharply as Turkish mills there have lost another market to which they conclude regular export sales as a result of the negative influence of the recent developments in Northern Iraq. Despite the depreciation of the Turkish lira against the US dollar, domestic finished steel prices in Turkey are still falling, and so are Turkey’s finished steel export quotations.
The declines seen in import scrap prices in Turkey as well as the weakness of demand from Turkish mills are causing buyers in other importer countries to maintain a wait-and-see stance. As both import scrap and billet quotations in the Far East have softened, it is observed that buyers there are not even giving firm bids to suppliers, instead waiting to see Turkey’s scrap purchase prices. Meanwhile, scrap collection prices in several regions such as the US, Europe and Japan have moved down.
SteelOrbis has been informed that some Turkish steel mills have reduced their production hours, and are trying to be cautious about their electrode and scrap consumption. As most Turkish steelmakers’ import scrap purchase volumes for October and November shipment are at very low levels, market sources state that they may continue to limit their production until gaining a clearer picture of their finished steel sales. But it is also believed that Turkish steelmakers will want to complete their scrap replenishment activity before winter, and so their demand for scrap is expected to increase in October. Considering the current volumes of scrap supply, it is foreseen that scrap prices may fall further in the short term, though they are not expected to indicate the sharp declines seen in previous months.