After following a sharp downtrend, Turkey’s import scrap market has been characterized by silence since the beginning of the current week, leading to uncertainties in the market until the deals disclosed to the market today, March 17.
SteelOrbis has heard that an European scrap supplier has concluded a transaction to Turkey’s Izmir region for HMS I/II 80:20 scrap at $425/mt CFR. Meanwhile, another European scrap supplier has reportedly concluded another deal to Turkey, indicating an average price at $435/mt CFR. Prior to these deals, SteelOrbis’ estimation for European origin HMS I/II 80:20 scrap was in the range of $432-435/mt CFR.
Market sources state that Turkish mills still need deep sea scrap for April shipment, while it has been observed in the latest deals that some mills have started to buy cargoes for May shipments. The Turkish mills have continued to exert pressure on import scrap prices during the current silence and the mills are aware that they can still get what they need for April when they seek to conclude new deals. The estimations for ex-US and ex-Baltic prime grade scrap prices to Turkey are in the range of $430-435/mt CFR, though no new transactions have been confirmed in this range. According to market players, some alternative markets such as Egypt have bought some cargoes from the scrap supplying regions, thereby reducing the downward pressure on prices to Turkey. On the other hand, as Turkey still needs a lot of cargoes for April and May shipments, with the total estimated at around forty to fifty, prices are expected to recover when the Turkish mills return to the market in full strength to meet their needs. Also, high freight costs will have an impact on prices, making it harder for sellers to accept lower quotations, some sources have stated. As a result, the trend of the deep sea scrap depends on the extent sellers can resist against the pressure exerted by buyers, but it is known that there are still sellers from all supplying region that have not yet concluded their traditional sales to Turkey. Meanwhile, during the SteelOrbis 2021 Spring Conference & 84th IREPAS Meeting held virtually on March 15, it was observed that price levels for prime grade scrap to Turkey are now expected to be above $400/mt CFR, instead of in the $300s/mt as in past years.
Short sea scrap quotations for Turkey have also moved down in line with the negative sentiment in the deep sea segment and are estimated to be at around $400/mt CFR Turkey for HMS I/II 80:20 scrap from Romania and the Adriatic region. Demand is also very slow for short sea scrap as market players are closely monitoring the deep sea segment to gain a closer understanding of the future trend.
Additionally, the local Turkish rebar market has been experiencing a tough period in terms of demand and prices. Due to the recent sharp fluctuations recorded in the Turkish lira- US dollar exchange rate, prices have been revised frequently by both mills and traders. However, market sources state that panic has been observed among traders, and so prices in the rebar spot market have moved down by higher margins. As mentioned at the IREPAS meeting, rebar demand is likely to gain strength as the difficult winter conditions in Turkey are coming to an end and the construction season lies ahead. Meanwhile, the local rebar market is waiting for the Turkish Central Bank’s decision on interest rates to be announced tomorrow, March 18. On the flats side, HRC prices are more promising, as well as the order books of flat steel producers. According to market sources, flat steel mills have no time to postpone their import scrap purchases a lot under the current circumstances and are more relaxed as regards paying higher price levels.