Turkiye: Imported ferrous scrap index down by $7/t w-o-w, activities remain slow amid an unclear outlook

Turkish imported ferrous scrap index witnessed a sharp decline as this mid-week Turkiye's scrap buyers procured a bulk vessel at $376/t levels from Europe although slow negotiations in the ferrous scrap sector were seen with no other fresh deep-sea deals being heard.

Despite aggressive offers, Turkish mills have been quiet for several weeks. Traders expect them to return to the market as melt shops continue to process scrap. US-origin HMS (80:20) offers at $390/t CFR were deemed unworkable for Turkish mills.

With a lower EU-origin workable level despite stable collection costs and a recently firm euro, the market remains uncertain as buyers seeking further discounts looking at the declining price and sentiment. Although some EU recyclers found the recent deal level unworkable due to the high collection costs, on the other hand, buyers expect these levels will be workable for a couple of deals.

Assessment trends

• BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $381/t CFR, down by $7/t w-o-w.
  
  
• BigMint's assessment for bulk HMS (80:20) from the US East Coast stood at $353/t FOB, down $6/t w-o-w.
  
  

The scrap-to-rebar spread was assessed at $195-197/t FOB, widened as compared to last week.

Earlier this week, Turkish deepsea import ferrous scrap prices remained unchanged. There was a lack of mill inquiries throughout the week, and sellers were offering more aggressively to stimulate demand.

Market comments: As per market participants, indicative tradable values for EU-origin HMS (80:20) range between $375-378/t CFR, with quick shipments and premium quality grades in HMS (80:20) would cost $378-382/t CFR. Benelux region collection costs remain firm at approximately Euro 315-318/t delivered to the docks. Despite a firm euro, European recyclers are struggling with high collection costs, making it challenging to lower dollar-denominated offers.

Baltic recyclers are also offering aggressively, with prices around $380-382/t CFR and indicative values between $378-$380/t CFR. US-origin HMS (80:20) prices range from $381-383/t CFR, with some offers reaching $386-388/t CFR. On the other hand, US domestic conditions remained mixed, with East Coast exporters slightly reducing prices but facing low flow. US sell-side sentiment remains uncertain, and Baltic recyclers are reported to have made aggressive offers.

A Baltic-origin deal was heard at $385/t CFR for HMS (80:20) and $405/t CFR for bonus scrap, but the exact timing remains unconfirmed.

A trader source informed that with buyers absent, sellers were not driving the market, and most recyclers had material available for sale. EU-origin HMS (80:20) was expected to reach below $380/t CFR.

A Turkiye-based mill is unwilling to pay more than $380/t CFR for HMS (80:20) scrap. Mills that have recently imported significant quantities of billets are considering production cuts. With the rebar market currently sluggish, these mills would need scrap priced at $370/t CFR to sustain margins. No official decisions on production cuts have been announced yet, as mills are still assessing market trends.

Outlook: Market insiders expect that export offers from the Baltic are less likely to drop, on the other hand, US and European ferrous scrap export offers will be softening in the coming days due to bearish response from steelmakers. This week has seen a couple of deals, a slight improvement compared to last week, mills will resume their early September loading scrap purchase most probably from Europe majorly.