Turkiye: Imported bulk ferrous scrap prices remain range-bound w-o-w

The Turkish imported bulk ferrous scrap index remained range-bound w-o-w. Participants adopted a cautious approach, with mills monitoring developments in the Chinese market and holding back from trades, in expectation of the US Federal Reserve's interest rate decisions.

Prices of ferrous scrap slightly declined, with strong offers posed by sellers due to low availability and high collection costs. Additionally, the present weakness in the German economy has pushed down dock prices marginally in the European Union (EU).

Dock prices in the EU regions, especially the Baltic, were at Euro 292-295/t for HMS (80:20) scrap, while most CFR offers were closer to the higher end at around $366-368/t.

Recyclers have continued to hold offers firm amid limited collection activities, while buyers are pushing scrap purchasing prices below $365/tonne (t).

Market Commentary

As per market insiders, "While other EU regions show no significant supply shifts and the US market remains tight, Turkish buyers are bidding $10/t lower than the current prices, a move that seems inconsistent with market trends."

Indicative tradable values for US-origin HMS (80:20) were reported to be at $368-370/t CFR.

In contrast, EU-origin HMS (80:20) prices were signalled to be at $363-364/t CFR.

A recycler stated, "We have not made any offers to mills yet, but we anticipate that prices will strengthen when they come back to the market next week."

Another recycler highlighted, "Many buyers are hesitant to book ferrous scrap, instead preferring to wait for China's reaction to the US Federal Reserve's recent interest rate cut."

• BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $370/t CFR and remained stable w-o-w.
  
  
• BigMint's assessment for bulk HMS (80:20) from the US East Coast stood at $343/t FOB, down by $2/t w-o-w.
  
  

A Turkish mill noted that while scrap sellers are sceptical about China's recent moves, key enabling factors are in place. China's interest rate cut, reserve ratio reduction, and scheduled October steel production cuts could support the market.

However, many Turkish buyers still have not secured October shipments, suggesting that scrap prices may remain firm.

US exporters are still aiming for deep-sea deals above $370/t for HMS (80:20), but Turkish buyers have lowered their bids to about $360/t CFR, citing global uncertainties, especially regarding the Chinese economy.

Scrap-to-rebar margins have improved, with FOB sales at $585-590/t and local sales at $590-595/t.

Recent deals

• A Lithuanian-based supplier sold a bulk cargo comprising HMS (80:20) at $366-367/t to a west Black Sea region-based mill on CFR Turkiye basis.
  
  
• A Netherlands-based supplier sold a bulk cargo comprising HMS (80:20) at $364/t to a Turkish mill on a CFR Turkiye basis.
  
  

A market participant from Turkiye mentioned that because of a steel surplus and low prices, Chinese suppliers are now targeting the Middle East and Africa. If Chinese prices remain low, Turkish steelmakers might keep buying billets instead of scrap, as making steel from scrap is less cost-effective.

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Outlook

Market insiders believe that price variations will be minor in the coming days, with a slight decrease being the most likely outcome. Prices will be range-bound if suppliers remain firm with their offers. On the macroeconomic front, the latest cut in the Fed rate by 50 basis points could lead to short-term liquidity shifts, but it is unlikely to have an immediate impact on the scrap market unless there is a significant shift from China to boost global demand.