Despite the significant declines seen in Turkish steel producers'
scrap inventories, demand in
Turkey for import
scrap has failed to improve, causing
scrap prices to fall.
Although Turkish steel mills' import
scrap purchases for January shipment were not completed in December, their demand for import
scrap is still at very low levels. In the first week of January, domestic
scrap quotations in the US increased for the January buy-cycle. For almost two months, no ex-US
scrap deal had been heard in
Turkey as US-based suppliers had difficulties meeting Turkish steel producers' price expectations due to the continuous upward movement of
scrap quotations in their domestic market since November. However, after the first week in January domestic
scrap prices in the US have moved on a soft trend up to the present amid the weak demand from
Turkey - the most important export market for US-based
scrap suppliers. It is observed that, under the current circumstances, US-based
scrap suppliers, having in previous weeks refused to offer HMS I/II 80:20
scrap to
Turkey at below $300/mt CFR, have since been forced to reduce their prices to
Turkey. Accordingly, a Turkish steel producer concluded an ex-US deal last weekend, with the price of HMS I/II 80:20
scrap in the cargo at $282/mt CFR.
Turkish steel producers are experiencing serious difficulties with their finished steel sales. While their domestic finished steel sales have nearly come to a halt due to the ongoing political and economic uncertainties in
Turkey, their export sales have also failed to improve. This situation is an obstacle to the revival of Turkish steel producers' demand for
scrap, while it is observed that Turkish mills have even rejected the price level of $282/mt CFR for HMS I/II 80:20
scrap this week, while their price ideas for HMS I/II 80:20 are now below $270/mt CFR. Additionally, Turkish steelmakers' price ideas for ex-Black Sea A3 grade
scrap offers are currently at $250/mt CFR, though the latest ex-Black Sea deal in
Turkey for the same grade has been concluded at $260/mt CFR.