Turkiye: Imported ferrous scrap offers rise $10/t w-o-w on bullish demand from mills

• Turkish producers gain from strong local rebar sales
  
  
• Scrap demand to rise further as Nov'24 approaches
  
  

Turkish imported ferrous scrap prices rose significantly by $10/t w-o-w, as steel producers are actively securing deep-sea scrap for November shipments at rising prices, driven by increasing steel and iron ore offers in China and improved demand in Turkiye's longs markets. The uptick in prices is largely attributed to domestic long steel demand and a strengthening Chinese market, supported by recent government stimulus measures that have improved sentiment.

Negotiations in the ferrous scrap sector resumed, as Turkish producers benefitted from strong local rebar sales, which allowed them to raise scrap price tags. While some mills are adopting a wait-and-watch approach, sources indicate that demand for scrap will increase as November approaches. US exporters are targeting prices above $380-385/t CFR Turkiye for HMS (80:20).

Market insiders inform that bids for US HMS (80:20) scrap at $380/t CFR were rejected, resulting in a price increase to $385/t today, with expectations of tags reaching $390/t by the end of this week. Buyers are capitalising on cautious sentiments among sellers, while strong demand has pushed scrap-rebar spreads to their highest levels since June 2023.

Indicative prices for Baltic and US-origin HMS (80:20) were at $377-380/t CFR.

Assessment trends

• BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $378/t CFR, up by $10/t w-o-w.
  
  
• BigMint's assessment for bulk HMS (80:20) from the US east coast stood at $352/t FOB, up $11/t w-o-w.
  
  

Currently, the scrap-to-rebar spread has declined to $212/t, with rebar prices at $590/t and US-origin HMS (80:20) at $378/t CFR.

According to a leading US scrap supplier, the Turkish market has reached a price peak for HMS (80:20); however, this surge may not be directly linked to the ongoing strikes. It is also worth noting that iron ore prices have touched similar peaks.

Indicative offers for EU-origin HMS (80:20) were at $375-380/t CFR. Market sentiment remains bullish, with strong mill demand for scrap. Most sellers are holding out for higher prices. "Mills are calling everyone for scrap, but no one is offering," a Baltic recycler reported, citing a minimum seller target of $385/t CFR.

Around 5-6 deals from the EU and the US concluded at $360-377/t in the last seven days.

Turkish rebar market updates

"When rebar margins are this wide, it indicates that scrap prices must rise," stated a Turkish mill source.

Kardemir recently increased its 12-32 mm steel rebar prices by $25-28/t to TRY 21,500/t exw, equivalent to $628/t exw, excluding 20% VAT, with over 25,000 t reportedly sold in a short period.

Marmara Mills is offering rebars between $630 and $635/t exw. Two Turkish mill sources indicated tradable values for US- and Baltic-origin HMS (80:20) are above $377/t CFR, with one suggesting a minimum of $378-380/t CFR. An EU recycler noted a rejected bid for Baltic-origin HMS (80:20) at $380/t CFR, although this seems like an outlier.

Turkiye's long steel market saw a continued upward trend, with Kardemir, an integrated mill, successfully selling significant rebar volumes at higher prices. The mill raised its domestic rebar prices by TRY 1,040/t ($28/t) to TRY 25,800/t ($628/t) exw, following the last round on 19 September. The market quickly accepted these offers, allowing Kardemir to close orders for around 27,000?t in just an hour.

Other local suppliers quoted domestic rebar at $610-640/t exw, up from $600-635/t earlier in the week. Increased business activity, driven by a restocking campaign among Turkish traders, and rising import scrap prices are key factors behind this price surge.

Export rebar offers also rose $10-20/t since last week to $600-620/t FOB for November shipments, although export sales remain limited. "The growth is primarily due to a stronger local market, as producers struggle to find sufficient export interest," a source noted. Turkish wire rods are also seeing price increases, with offers at $610-630/t FOB for November shipments, up over $10/t since last week. Prices in lira include 20% VAT.

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Outlook

Industry experts indicate that imported ferrous scrap offers to Turkiye are expected to stay elevated, driven by strong rebar sales and rising iron ore prices. This trend is further supported by port strikes at US East and Gulf Coast ports, adding partial pressure to the bulk scrap supply chain.