Turkish steel mills had concluded a very limited number of import scrap deals last week and it is observed that their demand for scrap has remained at low levels in the current week. A Turkish steel producer concluded an ex-Denmark scrap deal last week, with the price of HMS I/II 80:20 scrap in the cargo at $375/mt CFR. Although there is no tightness in scrap supply as suppliers have cargos ready to sell, scrap offers to Turkey have remained at last week’s price levels. However, due to the weakness of demand received from Turkish steel mills, suppliers in the market are not so willing to issue offer prices and so activity in the import scrap market in Turkey is currently quiet.
Although US scrap suppliers’ price ideas for HMS I/II 80:20 scrap are at $380-385/mt CFR, Turkish steel producers are unwilling to accept these price levels, especially under the current circumstances as they are in no rush to conclude new deals thanks to the many purchases they had made in the previous weeks and also because of their belief that suppliers in the Baltic, UK and Europe will be forced to reduce their scrap offers to Turkey even though US suppliers may not be able to cut their prices, if the weakness of demand continues.
Additionally, short sea scrap offers to Turkey from Russia for A3 grade scrap are currently at $360-363/mt CFR , while the most recent Russian and Romanian A3 grade deals concluded in Turkey were at $359/mt CFR Marmara and at $355/mt CFR, respectively.
It was observed that Chinese steel suppliers had increased their offer prices when they returned from the Chinese New Year holiday, but prices had started to fall after the first week back from the holiday as domestic steel demand in China failed to meet initial expectations. Although domestic steel demand in China has been characterized by some fluctuations, as a result of the cold weather conditions hitting China it has remained at low levels, causing prices to fall further. The ongoing declines in Chinese steel prices have raised concerns among international buyers, leading to a slackening of global steel demand. These circumstances also prevent Turkish steel mills’ rebar export sales from rebounding, while, given the ongoing sharp depreciation of the Turkish lira against the US dollar this week, domestic rebar and wire rod quotations in Turkey are moving up.
With some countries already exempted from the 25 percent tariff imposed on import steel by the US within the scope of Section 232 probe, many others are still trying to gain exemptions. In addition to the uncertainty caused by this situation, which is expected to become clearer before the tariff in question comes into effect on March 23, Turkish steelmakers also want to wait and monitor developments in China and so their demand for scrap is not expected to improve in the current week.