Turkish steel mills have made a quiet start to the current week in terms of their demand for import scrap, which has dried up after having been at strong levels in the previous month and a half. Having increased in parallel with demand as of the beginning of February, import scrap quotations in Turkey have remained unchanged in the current week. While an ex-deep sea HMS I/II 80:20 scrap deal was concluded in Turkey at $380/mt CFR last week, offers for this grade had reached to $383/mt CFR, but failed to gain acceptance from Turkish buyers. In the current week, ex-Baltic HMS I/II 80:20 scrap offers to Turkey are heard at $375/mt CFR and $380/mt CFR.
Last week, US President Donald Trump signed the decree imposing the 25 percent tariff on steel imports from all countries except Mexico and Canada within the scope of the Section 232 probe. After Trump’s subsequent announcement of possible additions to the number of exempted countries - including the possibility of exemptions for certain companies, it is heard that several countries have started official negotiations in order to gain exemptions, with Australia already being exempted. With no developments on this issue being heard in relation to Turkey, it is foreseen that Turkish steel mills will experience greater difficulties in their export sales to the US if more countries are exempted from the 25 percent tariff. The import duty on steel imports imposed by the US as well as the price declines seen in the Chinese steel market have both been causing apprehension in the global market, while it is oberved that buyers are postponing their purchases as they wait for greater clarity. Meanwhile, the sharp depreciation of the Turkish lira against the euro and the US dollar has given cause for additional concern in the local Turkish steel market.
Against the backdrop of the above developments, supported by their increased import scrap inventories in the wake of recent deals Turkish steel mills are expected to prioritize their finished steel sales, and they are in no rush to conclude new import scrap transactions before seeing some improvement in their sales.