Turkiye: Imported ferrous scrap prices from US remain largely stable w-o-w; mills witness bearish steel demand

• Imported scrap prices from the US stable; recyclers face challenges amid uncertain supply
  
  
• Kardemir cuts local rebar prices amid minimal interest in longs; export rates stable
  
  

Turkish imported scrap prices remained largely stable as buyers keep quoting lower due to weaker domestic steel demand whereas US recyclers resisted due to slow scrap inflows which bring around five to six cargoes booked from the US and EU regions. Mid-week, Turkiye's import scrap prices remained range-bound as most steelmakers are avoiding import scrap bookings due to sluggish trading in the long products segment.

Turkish mills booked around ten to eleven cargoes during May from the US East Coast at comparatively range-bound prices amid ongoing weakness in both the Turkish steel sector and the US domestic market.

The US domestic ferrous scrap supply situation remains unclear. Some sources report an oversupply of PNS scrap, while shredded scrap supplies are tight in certain regions. This uncertainty about scrap availability, combined with varying opinions on inventory levels, is contributing to negative sentiment ahead of the upcoming trade.

As per a mill side source, "Recyclers want higher prices which is not viable for steelmakers as it's a bearish market with tight margins for the mills for rebar sales. So, there's no justification for scrap price increases."

During May, Turkiye purchased around twenty bulk cargoes. This raised uncertainty about preventing a potential downturn in domestic scrap pricing in June. Market participants noted a modest recovery in local long steel trade after a prolonged slump, but it remains below expectations. Limited export market activity continues to put downward pressure on prices.

As per market insiders, steel producers are concentrating on securing orders for finished steel, but sales remained limited. There are some local rebar deals, but not enough to boost scrap demand, so the situation remains unchanged.

BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $380/t CFR, and remained largely stable with a mere $1/t rise w-o-w.

BigMint's assessment for bulk HMS (80:20) from the US east coast stood at $356/t FOB, down $1/t w-o-w.

Turkish exported rebar stood at $580-585/t FOB. The scrap-to-rebar spread was assessed at $200-205/t FOB, range-bound as compared to the last week.

A US trader noted a bearish outlook on near-term prices, with little chance for an increase. "Mills holds the advantage in the market. Sellers with material won't succeed in pushing prices for mills amid weak demand."

Recent deals

• A US supplier sold HMS (80:20) at $379.5/t and shredded and bonus scrap at $399.5/t CFR to a Mediterranean region-based mill.
  
  
• A UK-origin supplier sold a bulk vessel to an Aegean region-based mill comprising HMS (80:20) at $373/t CFR Turkiye for early June, 2024 shipment.
  
  
• A Northern European supplier sold a bulk cargo comprising HMS(80:20) at $372/t CFR Turkiye.
  
  
• A UK supplier sold HMS (80:20) at $373.5/t and bonus scrap at $397/t CFR to a Mediterranean region-based mill.
  
  
• A US-origin supplier sold a bulk vessel at $380/t CFR Turkiye for early June shipments.
  
  
• A Baltic supplier sold 40,000 t mixed scrap at $379.5/t for HMS, and $400/t for shredded and bonus scrap to a West Black Sea region-based mill.
  
  

Domestic market: Turkish steel producer Kardemir announced new rebar prices and prices varied among Turkish producers. Kardemir reduced prices for local sales, selling around 10,500 t at TRY 23,346/t exw. Domestic rebar offers rose by $5-10 /t to $590-620/t exw, with subdued market activity overall. Export rebar prices remained stable at $580-590 /t FOB for June shipment, with limited sales reported.

As per Turkish participants, "Local buyers are showing minimal interest in long products despite nominal decreases in interest rates. The Turkish lira has also maintained stability recently." A rumour about an export transaction for rebar priced at $570-575/t FOB Yemen and Latin America.

The locally produced billet is offered at $550-560/t exw, depending on the region, down from $560-580/t exw last week. Iskenderun manufacturers quoted at the higher end. Izmir region billets are $555-560/t exw, while Karabuk's are $550/t exw. Some Iskenderun deals last week were at $570-573/t exw, likely due to urgent needs. Turkish mills usually deliver within 15 to 20 days.

In the billet import market, sales of CIS-origin billet at $515-517/t CFR was rumoured, potentially from the Donbas region, but not confirmed. Concerns were raised about these prices being unusually low due to higher freight rates after the attacks on Novorossiysk port. Far East billet availability was heard at $540/t CFR a week earlier.

Yesilyurt Demir Celik, based in Samsun, Turkiye, is pursuing eco-friendly initiatives by applying for the final EIA approval to build a 100 MWm solar power plant in Sanliurfa province. The project, estimated at TRY 988.7 million ($30.7 million), will cover 60.55 hectares and is expected to generate 148.1 GWh/year using 163,637 solar panels. This marks the company's second significant solar project, following a previous investment of TRY 995.8 million ($30.9 million) for a 96 MWm facility in the same province. Yesilyurt Demir Celik's production capacity is 1.3 million tpy, including 550,000 tpy of wire rod and 950,000 tpy of rebar.

Turkiye's Finance Ministry has imposed fines totalling TRY 7 billion (USD 217 million) on two undisclosed steel companies following extensive tax audits targetting the sector. The fines are part of broader efforts to combat price instability, monopolistic practices, fake invoices, and unfair profit generation through shell companies. Major listed steel firms like Erdemir and Isdemir are confirmed not to be among those fined. Concurrently, the Financial Crimes Investigation Board (MASAK) is investigating potential money laundering in the steel industry. The government has also enhanced oversight with initiatives such as a rebar tracking system to ensure transparency in steel production and usage.

Outlook: Turkish mills are expected to maintain a bearish outlook until market conditions improve or steel sales and demand increase. Near-term bookings will likely remain sluggish, with limited rebar export activity will continue to put downward pressure on prices.