Turkish ferrous scrap prices plunge to 10-month low

The Turkish ferrous scrap market experienced a difficult week, with prices steadily declining to nearly 10-month lows. Early in the week, scrap prices held steady as recyclers resisted lowering their offers despite weak demand from mills. Offers for US-origin HMS (80:20) initially hovered around $374/tonne (t) CFR, but the absence of fresh demand indicated potential challenges ahead.

As the week progressed, the market sentiment turned increasingly bearish. By midweek, imported ferrous scrap prices began to slide as mills put more pressure on recyclers to lower their offers, anticipating further declines. The price of US-origin HMS (80:20) dropped to $370/t CFR, with deals being struck at even lower levels. Recyclers attempted to hold off on sales, hoping for a potential rebound later in the month as mills rushed to fulfill September shipment requirements. However, this strategy proved difficult to sustain amid an influx of cheaper Chinese billet imports and continuous pressure on prices.

By the end of the week, the market saw a sharp drop, with the index falling to $360/t CFR following confirmed deals at these levels. Recyclers were forced to accept lower prices as mills remained resolute in driving down costs, with some buyers speculating that prices could dip further to $350/t CFR. The situation was exacerbated by falling iron ore prices and a significant supply overhang of unsold scrap inventory, collected at higher costs earlier in the month.

Despite some chatter of potential cancellations of low-priced Chinese billet orders, which could support scrap prices, the overall market outlook remained bleak. Many market participants expressed concerns that the bottom had yet to be reached, anticipating further price declines in the near term.

Price assessments

• BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $360/t CFR, down by $14/t w-o-w.
  
  
• BigMint's assessment for bulk HMS (80:20) from the US East Coast stood at $333/t FOB, down $14/t w-o-w.
  
  

Recent deals

• A Europe-origin bulk HMS (80:20) vessel was heard to have been booked by an Aegean region based steel mill at $365/t CFR.
  
  
• A Europe-origin bulk HMS (80:20) vessel was heard to have been booked by a Black Sea region-based steel mill at $367/t CFR.
  
  
• A USA-origin bulk HMS (95:5) was heard to have been booked by an Aegean region-based steel mill at $373/t CFR, and shredded at $383/t CFR.
  
  
• A USA-origin bulk HMS (80:20) vessel was heard to have been booked by a West Marmara-based steel mill at $360/t CFR.
  
  
• A Europe-origin bulk HMS (80:20) vessel was heard to have been booked by a West Marmara-based steel mill at $360/t CFR.
  
  
• A UK-origin bulk HMS (80:20) vessel, totalling 22,000 t, was heard to have been booked by an Aegean region-based steel mill at $355/t CFR.
  
  
• A USA-origin bulk HMS (80:20) was heard to have been booked by an Aegean region-based steel mill at $363/t CFR, HMS (95:5) at $373/t CFR, and shredded at $383/t CFR.
  
  

Outlook

The near-term outlook for the Turkish ferrous scrap market is bearish, with prices expected to decline further due to an oversupply of scrap and weak demand from mills, which are pushing for lower offers. High inventory levels and decreasing collection costs are adding further pressure to the market. Although rising iron ore prices and the potential cancellation of high-priced Chinese billet orders may provide some support, they are unlikely to significantly offset the downtrend. Buyers are expected to continue negotiating aggressively, with prices possibly dropping to around $350/t CFR or lower before stabilising.