In deals from late last week, a slight price increase in Turkey’s scrap market has been confirmed. The cost of collection, and also taking into account the euro-US dollar exchange rate, leaves almost no margins for sellers to cut their offer prices to Turkey, while Turkish mills’ lack of finished steel sales and their failure to increase their sales prices are forcing them to maintain the current scrap purchase price levels. However, with the new month approaching fast, Turkish mills are showing readiness to negotiate with a slight rise in prices.
An Izmir-based Turkish steel producer concluded a deal on Friday, June 27, from the US for 22,000 mt of HMS I/II 80:20 scrap at $345/mt CFR and 3,000 mt of P&S grade scrap at $365/mt CFR. This level is $3/mt higher than the price recorded in the previous ex-US deal, also done on Friday.
Meanwhile, an ex-Denmark booking by a Marmara-based steel producer was closed at $341/mt CFR for HMS I/II 80:20 scrap and at $370/mt CFR for busheling scrap. The benchmark HMS I/II 80:20 scrap price for ex-Baltic cargoes has increased by $1.25/mt in line with this booking.
A third transaction was done by an Iskenderun-based steelmaker for HMS I/II 80:20 scrap from the Netherlands at $336/mt CFR, indicating a $0.5/mt decline in ex-EU scrap prices.
While Turkey’s import scrap market has remained silent for the majority of June with only episodic purchases, the month is now nearing its end. If Turkey wants to maintain its capacity utilization rates and buy more scrap cargoes for July shipment, this week may be livelier in terms of trading. Most market sources, among both buyers and sellers, think trade during the rest of the summer season will be lackluster at best. “There are so many uncertainties, not just the new war in the Middle East, but also on the trading side. Turkey’s rebar market is not recovering in terms of prices or sales,” a source at one Turkish steel producer commented today, June 23. Turkey’s import scrap market is expected to be remain within the $335-345/mt CFR range. “Turkish mills need to buy more cargoes for July shipment. Therefore, they need to accept a slight increase in prices. On the other hand, distressed cargoes from the EU may be sold at $335-340/mt CFR,” a seller said.
Market sources still report that the increased military activity in the Middle East, focused on Iran, is the main concern. After the United States bombed three of Iran’s main nuclear facilities early on Sunday, the Iranian parliament took the first step toward closing the Strait of Hormuz, which is critical for global oil transportation and trade. While the parliament approved a proposal to close the strait during its Sunday session, Iran’s top security body, the Supreme National Security Council, will make the final decision on whether the Strait of Hormuz will be closed, as reported by Al Arabiya. The European Union's top diplomat, Kaja Kallas, said that Iran closing the Strait of Hormuz would be dangerous and "would not be good for anyone." The Strait of Hormuz is one of the world’s most critical chokepoints for oil and gas shipments, with around 20 percent of global oil passing through it daily. It connects the Persian Gulf to the Arabian Sea, making it a vital route for energy exports from major producers like Saudi Arabia, Iran, and the UAE. Any disruption of this narrow waterway could cause global energy prices to spike and impact the stability of international trade.
