SteelOrbis

Turkish mills remain cautious on new import scrap purchases

Tuesday, 10 January 2017 16:04:51 (GMT+3)   -   Istanbul

While only one deep sea scrap deal has been heard in Turkey in the last week of 2016 and in the first week of 2017, it is observed that Turkish steel mills are in no rush to conclude new import scrap deals to provide for their needs. Although the scrap inventories of Turkish steel producers have declined significantly, they are dragging their feet as regards new import scrap purchases amid the increased political tensions in Turkey, the further depreciation of the Turkish lira against the US dollar, the harsh winter conditions which have slowed down industrial and construction activities, while the Turkish mills are also going through a difficult period in terms of their finished steel sales. 
 
Most scrap suppliers prefer to wait and see as demand from Turkish steel mills remains weak. Although domestic scrap prices in the US for the January buy-cycle have failed to meet initial expectations due to the weakness of demand from Turkish steel producers, they have risen by $23-46/mt compared to December, depending on region and quality.
 
Meanwhile, suppliers in the Black Sea region are having difficulties concluding scrap sales to Turkey amid the current harsh winter conditions and also due to the ruble gaining strength against the US dollar.
 
It is believed that Turkish steelmakers will maintain their cautious stance as regards import scrap purchases as finished steel demand in their domestic market has almost stagnated and also given the sluggishness seen in their export markets. Additionally, they are expected to try to prevent their import scrap purchase prices from climbing higher than the level of $292/mt CFR recorded in the deal heard last week and to focus on scrap purchases from the Baltic region and Europe.
 
Turkish steel mills' import scrap purchases for January shipment were not completed in December and they have not concluded purchases yet for February shipments. As a result, Turkish steel producers will need to restart their import scrap purchases in the short term or else it is believed there will be serious cuts in their output volumes. 

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