Following many import scrap deals concluded last week, Turkey’s import scrap market has experienced a quiet period in the current week.
Market sources agree that Turkish mills are out of the market, exerting pressure on import scrap prices. However, they still have needs for September shipments. This silence in the market is expected to continue at the beginning of next week. Although some believe new deals may be heard as of Wednesday, some expect deals to be disclosed towards the end of the coming week.
Market sources state that the local US scrap market is strong, while some suppliers are still trying to find the tonnages to fulfill their previous commitments, and some are even complaining about the scrap flow. The offers of ex-US HMS I/II 80:20 scrap are still at $290/mt CFR Turkey, according to some, who also comment that deep sea suppliers will not panic faced with the current silence from Turkey.
On the other hand, some sources state that Turkey has concluded many deals and caused prices to move up unnecessarily. Due to the withdrawal of Turkish steelmakers from the scrap market, scrap prices will need to be corrected approximately by $10/mt. The relatively small correction is explained by the strong US domestic scrap market, the strength of the euro against the US dollar, the positive sentiment in China, the high levels of iron ore prices, and the very positive trend observed in the flat steel market. Also, the negative impact of the depreciation of the Turkish lira against the US dollar and the slow demand in the local Turkish rebar market have attracted attention. These sources expect premium grade HMS I/II 80:20 quotations to decline to $275-280/mt CFR Turkey, while they expect ex-EU prices for the same grade to stand at $270-275/mt CFR.
Meanwhile, some market sources state that import scrap demand in Turkey has not decreased despite the current silence. “There are too many sellers in the market, causing mills to wait and exert pressure on quotations,” one source stated. Also, Kardemir’s billet sales were predicted to be opened at $420/mt and above but the mill set its price at $416/mt ex-works, causing a surprise in the market, leading some players to take a step back. Scrap sellers in the European region are unwilling to cut their prices to Turkey, according to sources, but this will depend on their positions. Ex-EU HMS I/II 80:20 scrap offers next week are expected to be at $285/mt CFR Turkey, while deals are expected to be closed at around $280/mt CFR.
Having said all that, market players are cautious about developments in the Mediterranean region, where the current tensions are closely monitored by all sides, as well as about developments in the financial markets.