Turkiye: Imported bulk scrap prices fall by $17/t w-o-w; weak export demand lowers rebar FOB price

The Turkish imported bulk scrap price index softened by $17/tonne (t) w-o-w after a sharp rise last week, as imported scrap prices continued their downward correction throughout this week amid cheaper European scrap prices.

Turkish mills highlighted the "normalisation" of scrap prices as being inevitable due to weaker-than-anticipated domestic demand for finished steel, particularly exports. Despite increased dockside scrap inflows in Europe, short-sea market constraints prevented a steep price drop.

As Turkish mills struggle with declining rebar sales and offer discounts, they continue to push for better scrap pricing. Insiders note that mills still require additional cargo for November shipments, so activity is expected to persist. However, many suppliers remain cautious, holding off on firm offers as they believe the downward trend may be limited.

Assessment trends

• BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $371/t CFR, down by $17/t w-o-w.
  
  
• BigMint's assessment for bulk HMS (80:20) from the US East Coast stood at $345/t FOB, down by $15/t w-o-w.
  
  

From Europe, increased scrap inflow led to heightened competition and price reductions, with EU-origin HMS (80:20) tradable at $370/t CFR and even lower, at around $365/t.

Around 6-7 bulk scrap cargoes were booked from the US and Europe. Major bookings from the US were at $377-378/t, whereas EU-origin scrap was sold at $367-373/t CFR Turkiye.

A West Marmara-based mill booked a bulk cargo comprising 28,000 t of HMS (80:20) at $367/t CFR and 7,000 t of shredded at $387/t CFR for November shipment, reflecting a further price drop in line with recent tradable levels of around $370/t CFR.

Currently, the scrap-to-rebar spread stood at $244/t, with rebar prices at $615/t and US-origin HMS (80:20) at $371/t CFR.

Short-sea markets showed signs of softening, though tight port supply helped limit the price drop. Turkish mills indicated that $360/t CFR could be workable, but suppliers were resistant to lower levels.

Industry sources mentioned that prices corrected due to weaker-than-expected Turkish export demand, with the earlier spike to $386-388/t CFR proving unsustainable.

As per market insiders, after a recent spike, prices have now stabilised and are softening locally. International markets are also trending downward in response to the decline in Turkiye, and iron ore prices are dropping as well.

A European yard owner noted, "European scrap prices are heavily influencing bulk pricing for Turkiye, but US prices were firm above $380/t till mid-week, with a few cargoes ready for prompt shipment. Meanwhile, Turkiye still needs over 10 vessels for November, giving US suppliers an edge in pricing."

A US scrap supplier commented, "There is demand for about a dozen cargoes for November, but the Chinese market has not provided a clear price trend for semis, which has pulled US-origin material prices down to $378-380/t CFR, with FOB levels at around $350/t. Turkish scrap supply for ongoing shipments seems stable, with 40% of their requirements covered by US sources, while UK- and EU-origin material are available at $370/t currently."

Industry insiders informed that Turkish scrap demand has slowed following an extended buying spree, as local rebar demand weakened. Most cargoes booked are scheduled for November shipment. EU suppliers, facing weak domestic demand, are under pressure to maintain margins. Turkiye's demand is expected to rebound, driven by China's anticipated stimulus revision.

Domestic rebar market

Turkiye's major long steel producer, ICDAS, is advancing its renewable energy strategy, with plans to build a 51.8 megawatt (MW) solar power plant in Kutahya, Aegean region, investing TRY 850 million (~$25 million). This project aims to enhance energy efficiency and reduce the company's reliance on traditional power sources. With a steel production capacity of 5.2 million tonnes (mnt) of billet and 2.9 mnt of long products annually, the move reflects ICDAS's commitment to integrating sustainable energy into its large-scale industrial operations. Construction is expected to begin in early 2025

Outlook

Market participants predict that US exporters are unlikely to accept lower prices until they complete their current orders priced above $380/t. Following that, they will likely need to reduce dockside prices by at least $10-15/t to align with market conditions. Despite the slowdown in demand, elevated billet prices maintain the scrap interest in shipments later this year. Meanwhile, the US market is expected to strengthen in November, with exporters expected to push back against lower bids from Turkiye.