Turkey: Ferrous scrap imports drop 24% m-o-m in Feb'22 as lira weakens

Turkey, the world's leading purchaser of ferrous scrap, witnessed a sharp fall of 24% in imports of the material in Feb'22 after these remained stable in Jan'22. The country imported a total of 1.87 mnt of imported ferrous scrap in Feb'22 vis-a-vis 2.46 mnt in Jan, as per customs data maintained with SteelMint. Notably, import volumes have dropped to an almost four-month low against 1.55 mn t seen in Oct'21.

Weakening of the lira and bearish market sentiments in the finished long steel market have continued to weigh down imported scrap bookings. Turkish mills' crude steel output was at 3 mnt in Feb'22, down 3.3% y-o-y, as per figures released by the World Steel Association (WSA).

On a yearly basis, too, scrap imports decreased by 7% compared with 2 mnt in Feb'21.

Market updates

• Netherlands, US major exporters: Netherland stood as a largest supplier of scrap with 0.3 mnt in Feb'22 compared to 0.08 mnt in the previous month.
  
  

Meanwhile, the US was the second-largest exporter with 0.29 mnt in Feb'22, but saw a marginal drop of 6% from Jan'22, as mills held back orders for Februry bookings.

• Limited demand amid economic instability: The Turkish construction industry is lagging behind due to skyrocketing inflation and insufficient demand, which, in turn, is leading to lower demand for imported scrap in the country for Feb'22 deliveries.
  
  
• Suspension of operations at mills: EAF steelmakers announced the suspension of crude steel production for three days amid hike in electricity costs. Many factories suspended operations till Feb'22. As a consequence, buying activities in the market has decreased. The heavy snowfall also caused logistical problems in the market.
  
  
• Lira crashes: The Turkish lira plunged against the dollar. It hit a record low of TRY 13.61 against the US dollar in end-Jan'22, vis-a-vis TRY 12.6 in end-Dec'21.
  
  

Outlook:

Imported scrap trade is likely to increase for March shipments, owing to increased demand from both domestic and overseas markets. But buyers may remain cautious in booking cargoes amidst escalated trade tensions and supply might became difficult through the Black Sea along with the continuous currency depreciation.