Turkey’s import scrap market has been characterized by a firm stance over the current week, supported by a report of an ex-UK deal today, December 29, which is said to have been closed at above $390/mt CFR.
SteelOrbis has heard that an ex-UK deal was done by an Iskenderun-based producer for HMS I/II 80:20 scrap at $396/mt CFR and bonus grade scrap at $416/mt CFR. The information was not confirmed by the buyer or the seller at the time of publication. However, the price in the transaction is in line with the market’s expectations. Prior to this deal, SteelOrbis’ reference prices for ex-EU HMS I/II 80:20 scrap were in the range of $379-380/mt CFR, as fixed in deals.
The lack of scrap is still the determining factor behind the price increase, with both sellers and buyers agreeing that scrap flow is on the low side. Since Turkey’s supplier regions are mostly on the Christmas holidays, collection activity is not expected to recover soon. Also, winter storms in the US are negatively impacting expectations for the region’s scrap availability in the future. A source at a Turkish steel mill said, “The current situation regarding scrap availability and mills’ scrap needs will not allow room to wait out the market to force a price reduction.” The Turkish steel market has hopes for the period ahead of the general elections in Turkey, officially to be held on June 18, 2023. Generally, market players think that the current government will announce several stimulus packages starting with the New Year. Some of them are expected to support the steel industry. Even today, according to some producers, the order books of Turkish mills are full until the second half of February, preventing them from taking steps to cut production rates further. Despite the current energy prices hampering Turkish mills’ ability to compete in their export markets, the local rebar market is once again showing a more active trading trend. One trader told SteelOrbis that there is some demand being received from construction sites, while traders are buying some rebar due to their expectations of a firm trend in the scrap segment. Also, billet quotations have the potential to increase since cheaper Iranian billet availability is shrinking due to gas production problems experienced in the country. As a result, SteelOrbis expects deep sea scrap prices to move up in January, though the pace of the uptrend will be determined by the available scrap volumes in the supplier regions.
SteelOrbis’ sources in the short sea segment report that there are no offers to Turkey. Short sea scrap sellers are monitoring the developments in the deep sea segment, expecting a price increase in January. SteelOrbis has increased its short sea HMS I/II 80:20 scrap reference price to $370-375/mt CFR due to the rise observed in the abovementioned ex-UK deal despite the lack of new short sea deals, though the next short sea scrap transaction could be closed above this level.
