Turkish steel mills were observed to have slowed down their import scrap purchases last week after accelerating them in the second week of January and concluding many deals until the beginning of last week. As a result, only a few import scrap transactions in Turkey were heard last week, while deep sea scrap quotations in those deals were slightly lower than the ones concluded in the previous week. While ex-Baltic HMS I/II 80:20 scrap was bought at $330/mt CFR Turkey two weeks ago, a Turkish steel mill concluded a deal for the same scrap grade last week at $326/mt CFR. Although ex-Baltic HMS I/II 80:20 scrap offers to Turkey are at $325/mt CFR in the current week, Turkish mills are not showing any interest in these offers. Similarly, demand from Turkey for short sea scrap is currently at very low levels. At present, Romanian and Bulgarian A3 grade scrap offers are at $315/mt CFR, with Russian A3 grade scrap offers standing at $320/mt CFR.
Instead of focusing on scrap purchases, Turkish steelmakers are trying to gain a clearer understanding of the inventory levels of scrap suppliers. While sales in the local Turkish finished steel market is still at low levels, Turkish hot rolled coil (HRC) producers are now observed to be in a more comfortable position due to their sales concluded in particular to European markets. However, Turkish rebar mills are experiencing difficult times regarding their sales to their main export markets, the US and the European Union, due to the 50 percent import duty and import quotas, respectively. Despite expectations of a reduction in the 50 percent duty in the US on steel imports from Turkey to normal levels, which have resurfaced ahead of the local elections to be held in Turkey at the end of March, no development has been yet been heard in relation to this issue. It was observed that Chinese mills and traders tested various price strategies last week, but the trends of Chinese steel prices and markets after the Chinese New Year holiday are still not fully clear. While it is observed that the positive signals from the ongoing trade negotiations between the US and China have not been reflected in the markets yet, Turkish mills are waiting for China’s domestic and export prices to become clearer in order to gauge their chances for semi-finished and finished steel sales in the Far East region.
Given the current market circumstances and also supported by their many previous scrap bookings, Turkish mills are not expected to rush to conclude new import scrap purchases. Meanwhile, it is seen that scrap suppliers are constantly avoiding voicing offers amid the weakness of demand, and instead they are focusing on scrap collection activities following the sales they have already made. Import scrap prices in Turkey are expected to come under downward pressure in the current week, while scrap purchases by Turkish buyers are expected to remain at limited levels.