Turkiye: Imported bulk scrap prices fall to near-3-year lows on weak steel demand

• Weak finished steel sales pressure down prices
  
  
• Recovery likely post-Lunar New Year holidays
  
  

Turkish deep-sea imported ferrous bulk scrap prices fell by $8/tonne (t) w-o-w to levels last seen in June 2022 for HMS. Mills continued to replenish their scrap inventories at lower prices, despite weak finished steel sales.

Market sources indicated that Turkish mills are currently seeing an abundance of scrap offers in the market, allowing them the scope to choose amongst these to meet their needs whenever they want to restock.

Buyers suggested that ample availability for February shipments, along with leftover January cargoes, could further drive down prices. However, sellers believed that prices might have already reached their lowest point.

Weak finished steel sales pressures scrap prices

The primary reason for the price decline was slow sales of finished long steels. Market participants believe that "the downward trend in scrap prices will persist due to limited steel sales".

Another market participant reported higher February shipment offers, with EU-origin prices ranging from $335-338/t CFR. A short-sea supplier said, "Prices are at two-year lows, which suggests the market will rebound. There is no fundamental reason for continued negative sentiments."

A Turkish mill source commented, "With excess capacity worldwide and declining values of finished steel inventories, buying scrap becomes risky without sufficient demand for finished products. As a result, scrap prices need to come down." The market participant identified $325/t CFR as the target price for US/Baltic-origin HMS (80:20).

A Marmara region-based steel mill said, "I believe European prices may drop slightly. Offers from Europe are at around $325/t, but we are nearing the bottom. However, winter conditions are posing challenges across the market, so we will have to wait and see."

A trading firm based in Turkiye, informed, "A near-term recovery in rebar export levels is not expected. The last prices heard were $565-570/t FOB, with bids at $555-560/t. I believe, prices will either remain the same or drop slightly."

A UK-based trader remarked, "There is now a greater willingness to sell scrap as prices near $335/t CFR compared to December 2024."

Another market source informed BigMint, "The sellers have completed their January shipments, and US sellers will be absent from the market this week."

BigMint's price assessments

• US-origin HMS (80:20) bulk scrap was assessed at $335/t CFR Turkiye, down $8/t w-o-w
  
  
• Bulk HMS (80:20) from the US East Coast stood at $310/t FOB, also down $9/t w-o-w
  
  

The scrap-to-rebar spread remained range-bound w-o-w at $225-230/t, as rebar export prices stood at $565-570/t FOB.

In the past 7 days, approximately 9-10 deals were concluded for Turkiye, with 5-6 seen from the EU and 3-4 from the US. Deal prices of HMS ranged from $327-342/t, while shredded prices were at 354-359/t.

Is a near-term price recovery likely?

Despite the bearish sentiment, some sell-side sources believe that scrap prices could recover as prompt availability decreases and sellers begin to hold on to their offers.

A Turkish mill participant informed that indicative tradable values for premium HMS (80:20) of US/Baltic origin were at $335/t CFR or slightly below. The source also mentioned offers for February shipment from EU/UK origin at approximately $330/t CFR, noting that mills found these levels unworkable.

Scrap prices are expected to keep weakening, with ex-Europe prices already down to $328-329/t CFR. Mills are struggling to sell rebar in both domestic and export markets. A trading source stated: "The price drop will eventually stop. While it is unclear if $320/t is the bottom, because collection costs remain high."

Market participants expect further price declines in the near future, with bearish sentiments prevailing. After recent transactions, there is a chance prices may dip below current levels. However, insiders believe a potential recovery could begin after the Chinese New Year, as rebar demand is nearly non-existent at the moment.