While Turkish steel mills’ demand for scrap has been at low levels since the beginning of July, it is observed that they are trying to maintain a cautious stance towards scrap purchases, though their demand for scrap increased slightly last week. Having trended downwards since the beginning of July, import scrap prices in Turkey have decreased to $328/mt CFR for ex-Europe HMS I/II 80:20 scrap and to $340/mt CFR for ex-US HMS I/II 80:20 scrap in a deal concluded last week.
When examining Turkish mills’ short sea scrap purchases, Russian A3 grade scrap transactions are observed to be concluded at $330-335/mt CFR, while purchases from other short sea regions are made in the range of $320-325/mt CFR.
Although an increase in Turkish steel producers’ demand for scrap has been seen as compared to the first days of July, demand is seen to be shifting to shredded scrap. As a result, the difference between prices of HMS I/II 80:20 scrap and shredded scrap has not returned to its traditional margin of $5/mt but is still at $8-10/mt.
Buyers in the local Turkish finished steel market are reportedly waiting for the Turkish Central Bank’s decision on interest rates due to be announced today, July 24, and this has prevented finished steel demand from improving. Additionally, the 200-day period determined for the quota by the European Union (EU) aimed at reducing rebar imports by approximately 50 percent has started. This has caused Turkish producers to focus on the European market in order to gain their share of the quota in question. It is observed that European buyers' demand for finished steel has increased before the traditional summer holidays since there is an expectation of a hike in European producers’ prices after the holidays against the backdrop of the protectionist measures of the EU. Turkish mills are currently focusing on their finished steel sales, while they are expected to shape their demand for scrap in line with their steel sales.