Turkiye: Ferrous scrap imports drop 22% y-o-y in H1CY23 amid weak economy, natural disasters

Turkiye's ferrous scrap imports decreased 22% to 9.61 million tonnes (mnt) in H1CY23 compared to 12.27 mnt in H1CY22, as per Customs data. Notably, exports declined from the US and UK which are major suppliers, due to interruptions in the market from natural disasters and weaker economic conditions, and a sliding Lira. The decrease in the volume of scrap imported into the country was associated with the low workload of local mills in the second half of H1CY23.

Import volumes touched a peak in March 2023 (2.34 mnt) in the last six months as Turkish mills began procuring for reconstruction activities after the earthquake occurred in February 2o23.

Meanwhile, Turkish steel producers struggled to maintain normal operations following the weak steel sector and a fluctuating currency rate in the last couple of months. Both domestic and international steel demand remained low which impacted scrap import volumes though import prices from the US in bulk continued a downtrend because of a lack of interest from the mill side.

The country imported 1.22 mnt of ferrous scrap in June 2023, a decrease of 29% m-o-m compared to 1.73 mnt in May. Scrap imports are also down by 23% y-o-y against 1.59 mnt in June 2022.

Billet imports: Additionally, Turkiye's steel billet imports rose by 41% y-o-y in H1CY23 (January-June) to 3.38 mnt compared to 2.39 mnt in the year-ago period, as per Customs data maintained by SteelMint. Russia was the largest exporter with 1.83 mnt followed by Algeria with 364,082 t. However, import volumes fell by 50% m-o-m to 395,921 t in June compared to 793,990 t in May.

Rebar exports: Turkiye's rebar exports fell by 56% y-o-y in H1CY23 to 1.64 mnt compared to 3.77 mnt in the year-ago period. Yemen was the largest importer with 85,736 t followed by Israel with 56,220 t. However, export volumes rose by 42% m-o-m to 348,752 t in June compared to 245,438 t in the previous month.

Similarly, the rebar export volume signifies that domestic consumption remains high as compared to H1CY22.

Country-wise shipments

• Imports from US down 11% in H1CY23: Turkiye's scrap imports from the US declined by 11% to 2 mnt, with the US remaining the top exporter to Turkiye for H1CY23 as compared to 2.23 mnt in H1CY22. After a sharp decline in imports in January and February, Turkiye's import volumes from the US again dropped in June by 49% m-o-m to 0.25 mnt from 0.49 mnt in May.
  
  
• Imports from the Netherlands increase: Shipments from the Netherlands increased by 40% in H1CY23 to 1.08 mnt. After exporting higher volumes in February, March, and April, there was a sharp decline in the volumes towards the end of H1CY23. Imports dropped 8% m-o-m to 0.11 mnt in June as compared to 0.12 mnt in May.
  
  
• Shipments from UK decline: The UK exported 0.73 mnt of scrap to Turkiye in H1, down 34% compared to 1.11 mnt in H1 CY22. Similarly, m-o-m volumes in June decreased significantly by 75% to 0.02 mnt from 0.08 mnt in May, the lowest volume in the last six months.
  
  

Key updates

• Crude steel output declines: Crude steel production in H1CY23 also witnessed a 16% decline to 15.9 mnt as compared to 19 mnt in H1CY22, as per data maintained with SteelMint.
  
  

• Lira crashes: The value of the Turkish lira dropped to 26.04 in June from 18.68 in January.
  
  

Outlook

After a period of subdued activity towards the end of H1CY23 due to a fluctuating lira and weaker demand in the domestic market, Turkish mills are expected to procure actively the second half. Hence, it is expected that import volumes may rise in the near term as demand is anticipated to be high.