Turkiye: Imported bulk ferrous scrap offers rise by $10/t w-o-w; prices to remain firm on tight supply

• Turkish domestic rebar prices firm; overseas demand remains slow.
  
  
• UK ferrous scrap exports weakened amid tight supply.
  
  

The Turkish imported bulk scrap price index rose by $10/t w-o-w, though the market remained slow towards the second half of the week, despite steady demand for November shipments. Industry sources noted that the most recent deals were concluded on 8 and 9 October.

As per market participants, following a steady rise, Turkish scrap prices have stabilised with minimal fluctuations, as momentum from China shows signs of slowing. However, the ongoing tight supply may not fully meet demand, potentially creating upward pressure on prices.

As per market insiders, Turkish mills showed strong demand for imported ferrous scrap to sustain better domestic rebar sales.

So far, 16-18 cargoes have been booked for early November shipments, with ICDAS securing 6-8 vessels and IDC booking 4-5. As mills gear up to fulfill domestic and rebar demand for November, total bookings are expected to increase throughout the month.

Market insiders suggest that while current offers are holding steady, supply constraints could lead to further price hikes if demand continues to outpace availability.

Around 5-6 bulk scrap cargoes were booked from the US and Europe, with major bookings from the US at $385-388/t, whereas EU-origin scrap was sold at $378/t CFR Turkiye.

Assessment trends

• BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $388/t CFR, up by $10/t w-o-w.
  
  
• BigMint's assessment for bulk HMS (80:20) from the US East Coast stood at $360/t FOB, up by $8/t w-o-w.
  
  

Currently, the scrap-to-rebar spread stood at $222/t, with rebar prices at $610/t and US-origin HMS (80:20) at $388/t CFR.

Market sentiment appears mixed in the US, as exporters express uncertainty about the direction of pricing. However, there is a belief that the East Coast market may stabilise at higher levels.

The UK ferrous scrap export market has faced ongoing challenges since July, primarily due to tight supply and strong competition across all grades. This observation was highlighted in the latest market overview from the Bureau of International Recycling (BIR) on 8 October.

The export market for UK ferrous scrap has weakened steadily, with HMS-grade material prices for shipments to Turkiye dropping slightly below $360/t early in the third quarter.

Tim Bird, a member of BIR's ferrous division, noted that container costs for ferrous scrap exports have declined since July, which, combined with a weaker domestic currency, has complicated the passing of price reductions to the market. The exchange rate, currently at GBP 1 to $1.31 as of 9 October, has fluctuated from GBP 1 to $1.34 on 1 October to GBP 1 to $1.27 on 8 August, discouraging foreign buyers from purchasing materials priced in sterling. Consequently, sourcing material at competitive prices has become increasingly challenging, negatively impacting steelmaking margins.

Kardemir secures moderate rebar sales at higher prices amid stabilising market

In the domestic long steel market, conditions are improving due to production cuts and rising prices. On 9 October, Kardemir launched a rebar tender at TRY 26,400 (approximately $770/t) for 12-32 mm material, up from TRY 25,800/t on 2 October. Kardemir sold about 20,000 t before closing sales for the day.

Other Turkish steelmakers maintained stable domestic rebar prices at $620-650/t exw, though sources caution that this may weaken as the restocking campaign nears its end. Overseas demand remained limited, with export offers increasing by $20/t to around $620/t FOB for November shipments.

Kardemir also raised prices of local wire rods (5.5 mm SAE 1008-1010) by $40/t to $655/t exw. Prices in TRY include a 20% VAT, while those in dollars do not. The current exchange rate is TRY 34.27 per dollar.

Demand and pricing have improved in the Iskenderun region, especially in areas impacted by the devastating earthquake in February 2023, further driving the need for scrap.

Outlook

Industry experts indicate that imported ferrous scrap offers to Turkiye are expected to remain range-bound, as strong rebar demand is likely to support upcoming scrap purchase prices, although iron ore prices have softened recently.