The pessimistic sentiment in Turkey’s import scrap market continues as the sharp fluctuation of the Turkish lira-US dollar exchange rate has not made price estimations any easier. The expectations for ex-US and ex-Baltic HMS I/II 80:20 scrap are now at $460-465/mt CFR, while for ex-EU HMS I/II 80:20 scrap it is at $450s/mt CFR Turkey. Market players state that Turkish mills are taking their time to carry out their delayed maintenance works in these uncertain times, while at least five mills are planning to take a break from production in January. This strategy causes mills to postpone their deep sea scrap purchases for now, though a source from a mill stated that, if the exchange rate stabilizes in the coming days, delayed scrap demand may be released in the near term. On the other hand, the sharp appreciation of the Turkish lira against the major currencies observed over the past 24 hours was interpreted as an opportunity by some construction companies today, leading them to purchase rebar from traders, SteelOrbis understands. Turkish mills have also increased their dollar-based domestic rebar quotations today to offset the fluctuation in the exchange rate, while some are still willing to give discounts for large tonnages.
At a conference held today by the Foreign Trade Association of Turkey, attendees repeated that Turkey is facing some problems in the long run in relation to import scrap procurement as supplier countries are maintaining more protectionist policies for the raw material. Also, the green production strategy of the international steel market signals higher costs for Turkish mills in the coming years. Sentiments regarding China were another important topic at the conference, with most attendees agreeing that China’s strategy on exports will be a determining factor for Turkey’s finished steel export sales in 2022.
Meanwhile, two relatively older ex-Canada scrap cargoes were disclosed to Turkey’s import scrap market today, December 21. SteelOrbis has learned that a Marmara-based mill concluded a deal for one of the cargoes two weeks ago, with the cargo consisting only of HMS I/II 95:5 scrap at $482.5/mt CFR. This price level is not indicative of the general price range today. Also, another ex-Canada deal was done by an Izmir-based mill early last week for HMS I/II 95:5 scrap at $476/mt CFR and shredded-bonus scrap at $486/mt CFR. Also, the price cannot be considered to be indicative now.
In the short sea segment, a Romanian cargo of HMS I/II 80:20 scrap was closed at $430/mt CFR Marmara this week. “The market is relatively silent,” a source stated. Similar to the deep sea segment, the fluctuating exchange rate is taking its toll on short sea scrap demand. The problems on the Ukrainian side continue, as it is now considered impossible to purchase any scrap form there. A supplier reported a cargo from Libya to Turkey of HMS I/II 90:10 scrap sold at $443/mt CIF Iskenderun, estimating the HMS I/II 80:20 scrap price from the same region at $430-435/mt CIF Iskenderun.
