Following their very limited import scrap purchases throughout July, Turkish steel mills are still observed to be very cautious as regards concluding new import scrap deals. Turkish steel producers’ demand for scrap for September shipments is expected to increase in the short term as no significant production cuts have been heard in Turkey, while their purchases so far for September shipments are quite insufficient. Furthermore, the Feast of Sacrifice holiday which will last a full week starting from August 20 also needs to be taken into account.
Last week, ex-US HMS I/II 80:20 scrap offers to Turkey declined to $335/mt CFR against the backdrop of the downward pressure exerted by Turkish mills and the weakness of demand. Meanwhile, in the most recent short sea scrap deals in Turkey, Romanian A3 grade scrap prices were at $315/mt CFR Marmara, while Russian HMS I/II 90:10 scrap prices were at $328/mt CFR. Additionally, Russian suppliers’ current A3 grade scrap offers to Turkey are in the range of $325-330/mt CFR, while they are unwilling to reduce their offers further due to higher transportation costs.
As Turkish steelmakers continue their finished steel exports, albeit in small tonnages, their main problem seems to be with regard to domestic finished steel sales. With Turkish buyers having postponed their domestic finished steel purchases for a long time for various reasons, there is no revival in Turkish steelmakers' domestic sales at present due to the accelerated depreciation of the Turkish lira against the US dollar, with the exchange rate currently at high levels. It is believed that an increase in domestic finished steel sales would have a knock-on effect on Turkish mills’ import scrap purchases.