Turkey: Imported scrap market quite amid weak demand

Turkey, the world's leading ferrous scrap importer, remained silent for yet another week with no fresh bookings reported in recent days. The market remained silent amid extremely weak demand for finished steel.

Towards the end of last week, a US-origin cargo containing 22,000 tonnes (t) of HMS 1&2 (80:20) and 8,000 t of shredded scrap were booked at an average price of $476/t CFR Turkey by a West Marmara-based steel mill, SteelMint learnt from sources.

Due to the pessimistic mood, SteelMint's assessed price for US-origin HMS 1 & 2 (80:20) stands at $470/t CFR Turkey, lower by around $5/t w-o-w.

Turkey market highlights

• Lira plummets to new low: The Turkish lira dipped further against the US dollar amid worries of a further interest rate cut by the Turkish central bank despite soaring inflation. The rate slash is in line with the present government's policy of keeping interest rates low to boost growth. Turkey's lira devalued to trade at TRY 15.03 against the dollar compared to TRY 13.74 a week ago.
  
  
• Domestic scrap prices fall: Turkey's domestic scrap offers declined following the low import offers. However, market participants believe that currency deflation is the key factor behind the drop.
  
  
• Domestic rebar prices down: Subdued buying activities locally, and negative sentiments in the imported scrap market led to weakening in rebar prices. Turkey's long steel producer, ICDAS, reduced its domestic rebar prices by $30/t compared to the levels seen at the end of last week to $720/t exw- Biga and $727/t CFR Marmara.
  
  
• Automotive production moves south : In November, Turkey's automotive sector saw another production cut as in October. The country witnessed a y-o-y drop in vehicle production by 19.7% to 115,078 units as per the Turkish Automotive Manufacturers' Association (OSD). In particular, the total production of passenger cars stood at 70,974 units, falling by 22% y-o-y.
  
  

Meanwhile, commercial vehicle production amounted to 44,104 units, down by 15% y-o-y.

Outlook
Dull domestic market sentiments might keep steel mills under pressure. However, producers would start booking cargoes in the short term for January shipments to restock for winter.