Turkish mills book bulk scrap import cargoes after brief lull, prices drop further

Turkish steel mills have booked bulk scrap cargoes after a brief lull. However, the market movement remained slow. Imported scrap offers have fallen significantly in recent deals. Furthermore, after a round of bookings, business activities slowed down in the imported scrap market as buyers and steel mills took time to evaluate the market situation. Negotiations were not active and no fresh bookings were recorded.

Turkish steelmakers focused on the finished steel sector where prices are under pressure due to weak demand.

SteelMint's assessment for US-origin HMS 1&2 (80:20) stands at $345-340/t CFR, down by around $30/t w-o-w.

The Turkish Energy Market Regulatory Authority has already raised electricity prices for industrial use by 50% from 1 September, while natural gas distributor, Botas, has raised gas prices for industrial use by 50.8%. This has increased the production cost and declined the margin from steel sales, SteelMint notes.

Fresh deals

• Buyers recently booked a European cargo comprising HMS 1&2 (80:20) and shredded at $340/t and $355/t, respectively. The cargo was booked for prompt shipment.
  
  
• Another European supplier booked a 25,000 t bulk scrap cargo. The cargo comprised 10,000 t of HMS 1&2 (80:20) booked at $356/t, 13,000 t shredded sold at $376/t and 2,000 t of bonus booked at $376/t CFR.
  
  
• Furthermore, an Aegean region-based steel mill has booked an UK-origin bulk cargo at an average price of $342/t CFR.
  
  
• On the other hand, a Black Sea region-based steelmaker booked a 35,000 t bulk cargo. The cargo contained 25,000 t of HMS 1&2 (80:20), and 5,000 each of PNS and shredded booked at an average price of $335/t CFR.
  
  

Factors driving domestic market

• Lira largely stable against dollar: The Turkish currency, Lira, remained largely stable for yet another week. The currency is now trading at 18.2.
  
  
• Domestic scrap prices decline: Domestic scrap prices continued to decrease, following a decline in the import market and a weak finished steel market that kept prices under pressure. A few steelmakers announced a decline in their procurement prices for local scrap. The unfavourable situation in the finished longs segment is also weighing on scrap prices. Other companies kept their scrap prices unchanged so far, although market players believe that the mills will revise prices soon, considering the current market situation.
  
  
• Billet market improves: Despite inadequate support from finished steel producers and overall pessimistic market sentiment, there was modest billet trading activity in the domestic market, whereas mills were actively trading billets.
  
  
• Rebar prices move downwards: The country's steel producers continue to lower their rebar prices to both domestic and overseas markets on sluggish demand. Offers from Turkish producers in the domestic rebar market are now in the range of $670-680/t exw depending on the region. Turkiye's long steel producer ICDAS lowered its rebar prices to $690/t exw Biga and $701/t CFR Marmara. The absence of buying interest from customers remained the major reason behind the price drop, whereas rebar production costs remain extremely high despite lower import scrap prices.
  
  

Outlook: Overseas scrap suppliers are likely to hold their offers, owing to the continuous downtrend in scrap prices. If suppliers hold offers further correction may slow down, whereas buyers are trying to secure maximum discounts.