Having improved slightly last week, this week Turkish steel mills’ demand for import scrap has slackened and their scrap purchasing activity is once again quiet. With the political crisis between Turkey and the US which started at the weekend causing a sharp depreciation of the Turkish lira against the US dollar, finished steel prices in Turkey have increased due to the rises seen in import scrap quotations over the past week and also due to the changes in the Turkish lira-US dollar exchange rate. However, finished steel buyers in Turkey, who have been postponing their purchases for a while now, are generally in no rush to conclude new bookings due to current economic and political uncertainties. Although finished steel buyers have stepped up their purchases slightly, no real demand revival has been seen in the local Turkish finished steel market. On the other hand, following its long holiday on October 1-8, China returned to the international markets on Monday, October 9, with its domestic finished steel and semi-finished steel prices moving down for most the last two days. In parallel with the declines seen in the Chinese steel futures markets, iron ore prices declined to $61/mt today, October 10, causing both finished and semi-finished steel quotations in China’s domestic and export markets to fall sharply.
Turkish steel producers are in no rush to conclude import scrap purchases amid the price declines seen in China, the weak demand received from finished steel buyers as well as the uncertainties surrounding the future trend of the Turkish lira-US dollar exchange rate which has already declined slightly following the sharp upward movement recorded yesterday. After the ex-US scrap deals concluded in Turkey at the end of last week at $310/mt CFR and $315/mt CFR, a Turkish steelmaker concluded an ex-Europe scrap transaction yesterday at the average price level of $310/mt CFR. Also, today, a Turkish steel mill opened a tender to buy import scrap, while it is believed that offer prices at $300-310/mt CFR from Romania and Russia may be available for this tender. While ex-Baltic scrap offers at $325/mt CFR are currently heard in the market, it is believed to be difficult for Turkish mills to accept this level without first gaining a clearer picture of the future trend of the import scrap market.