Having limited their scrap bookings since mid-November and lagging behind in terms of meeting their scrap needs for January shipment, Turkish steel producers started to step up their demand for scrap late last week. In previous weeks, Turkish steel producers’ targeted price levels for scrap bookings were significantly lower than the scrap offer prices received from foreign suppliers and only a few suppliers gave scrap offers to Turkish producers at what were considered to be affordable levels. As a result, Turkish steel producers had fallen behind in terms of booking scrap for January shipment and so they are now seeking to complete their scrap bookings before the Christmas and New Year holiday period which starts this coming weekend; they are no longer insisting on their target scrap purchase prices, being obliged to accept scrap suppliers’ current offers.
Import scrap prices in Turkey have risen considerably in the deals concluded since late last week as compared to the scrap deals concluded in previous weeks. Previously, the most recent ex-US scrap deal in Turkey had been concluded in the first half of November, with the price for HMS I/II 80:20 scrap at $275/mt CFR. Ex-US scrap offers have now moved up sharply in line with the price hikes in the US domestic scrap market and the latest ex-US scrap deal in Turkey has been concluded at $296/mt CFR this week. Also, an ex-Baltic scrap supplier, who has been in the Turkish market for the last two weeks but was unwilling to reduce prices to Turkish mills’ targeted levels, has this week sold HMS I/II 80:20 scrap to Turkey at $287/mt CFR.
Having had to accept increases in scrap prices in their latest bookings, Turkish producers have reflected these increases in the Turkish steel market, raising their domestic finished steel prices. Even though demand in the local Turkish finished steel market has improved slightly in line with the upward trend of prices, buyers are still cautious and are hesitating to conclude bookings amid political developments in Turkey. Although Turkish mills are expected to continue to conclude scrap bookings this week, they will likely adopt a cautious stance considering the political situation in Turkey as well as the lack of strength of domestic finished steel demand.