Turkish imported scrap prices up $11/t w-o-w; market active amid restocking

Turkish imported ferrous scrap prices kept moving north amid firm offers from suppliers like Europe and the US. Many deep-sea sellers did not want to miss the opportunity of sales for the first half of December shipment having thought three weeks ago that they could be selling $15-20/t lower than recent spot market prices. Continental dockside purchasing prices are workable for exporters, too, at the current Turkish scrap price level- exporters can still buy HMS (80:20) now at Euro 300/t delivered to Amsterdam dock despite mentions of prices at Euro 305-310/t delivered.

As per market participants, Turkish steelmakers booked around 25 deep-sea import scrap cargoes in October, with a total tonnage of over 700,000 t. This is the same level as September purchases. Almost all of the cargoes were scheduled for November shipment, with several batches bought for December loading. Scrap prices have continued to rise in November due to tight availability and low stocks at Turkish mills. Insiders believe that prices could stabilise in the short term but then go up again when cargoes for January shipment are needed.

SteelMint's assessment for HMS (80:20) bulk from the US rose to $374/t CFR Turkiye, a $11/t hike w-o-w.

An insider mentioned that demand for flat steel has improved in the US due to the end of the UAW strikes, and prices are increasing daily. There is less pressure on US recyclers to export scrap. Scrap prices typically increase in the winter due to seasonality as well.

Recent deals:

• A west Marmara-based steel mill booked European cargo comprising HMS (80:20) at $373/t on a CFR Turkiye basis.
  
  
• A northern European seller sold cargo comprising HMS (80:20) scrap at $377/t CFR Turkiye.
  
  
• A Europe-based seller sold HMS(80:20) bulk cargo at $377/t to a West Marmara-based mill on a CFR Turkiye basis.
  
  
• A France-origin seller sold HMS(80:20) at $372/t CFR Turkiye whereas a Romania-origin scrap dealer sold HMS(80:20) cargo to an East Marmara-based mill at $359/t CFR basis.
  
  
• A UK supplier sold HMS (80:20) scrap at $367/t CFR Turkiye to a Mediterranean mill.
  
  
• The same mill secured French HMS (80:20) scrap at $370/t CFR Turkiye.
  
  
• Additionally, a cargo of UK origin with HMS (80:20) scrap was sold to an Aegaen region-based mill at $365/t CFR Turkiye last weekend.
  
  

Domestic scrap market: After a long period with stable prices, Turkish steel producers increased scrap purchase prices in lira terms in response to rising import scrap prices. However, the lira's depreciation offset the upward move, and US dollar-equivalent prices continued to decline. Around 6 and 7 November, most Turkish steelmakers raised their lira-based scrap purchase prices by TRY 300-700/t. The US dollar equivalent fell by $2-15/t due to a 7.1% lira devaluation over the period. Only a few mills increased their US dollar-equivalent prices by $2-6/t.

Turkish domestic rebar prices have increased by $25/t from around $550/t ex-works to $575/t exw since 27 October during a time in which scrap import prices have increased around $14/t. Scrap import prices have rebounded a total of around $20/t but rebar prices have overall increased at a faster rate.

The main reason for the lira-based price increases is the higher cost of imported scrap and producers' desire to secure some domestic scrap volumes. Import scrap availability is low and prices have increased sharply, so mills have started to raise their domestic scrap levels to attract material from local collectors, as per the market scenario.

IDC's sales down: The devaluation of the national currency, higher expenses, and a slight decrease in sales volumes further hampered the financial performance of IDC. The company's operating income in the lira increased by 67.6%, but it dived deeper into loss over the period under review.

Billet market: Turkish integrated steel producer, Kardemir, sold significant billet volumes in the domestic market at competitive prices. Although the Turkish billet segment has been improving for the second week, buyers are reluctant to pay higher prices from other domestic producers, given Kardemir's most competitive offers. Foreign billet deals were also reported.

On 8 November, Kardemir increased its billet sales prices to the domestic market by $5-10/t from three weeks ago. S235JR and B420 billets (150x150 mm) were available at $525/t exw and $535/t exw, respectively. Other Turkish suppliers offered their billets at $535-545/t exw, up from $530-535/t exw a week ago. Some producers in the Iskenderun region were trying to trade at higher levels at $550-555/t exw and it is hard to find offers below $540/t exw, as per market participants.

Ford Otosan, a major carmaker and a leading manufacturer of commercial vehicles in Turkiye and Europe, is moving forward with its investment plan to raise market share and add new models to its range. The company has already realised half of its planned Euro 2 billion investment programme and has enlarged the production capacity of its Yenikoy plant in Kocaeli province.

Outlook: Turkish buyers may be concerned about the future supply of scrap or optimistic that demand for finished steel will eventually pick up. Deep-sea sellers are confident that demand for scrap in Turkiye will remain strong. Continental European exporters are still able to source scrap at competitive prices. Turkish rebar producers are raising prices despite weak scrap demand, suggesting that they are confident in the rebar market which will keep the scrap price trend firm in the near term.