Turkiye: Imported ferrous scrap prices from US largely stable w-o-w; mills secure EU-origin cargoes

• Deals heard mainly from Europe; US prices largely stable
  
  
• Kardemir lowers domestic billet prices amid weak demand
  
  

Turkiye's import scrap prices remained range-bound as mills are steadily restocking the same at stable prices. Negotiations in the ferrous scrap market mid-week indicated that most importers are delaying new deals due to weak demand for finished steel.

Turkish mills booked 5-6 cargoes in the last week of May majorly from Europe, at comparatively range-bound prices of $372-375/t CFR. Throughout May, Turkiye procured more than 25 bulk cargoes. However, a sluggish export market in steel has continued to exert downward pressure on scrap prices.

A European supplier commented, "HMS collection costs at the docks have been stable at Euro 310-320 for almost three months now. Further bookings from the EU are expected at $370-375/t levels, but prices could drop below $370/t if exporters struggle to find buyers at higher rates."

Turkish mills cannot lower prices further due to high collection costs, at Euro 310-320/t delivered to docks. "Billet prices from the Far East are also high, leaving no viable substitute for scrap," another trader informed.

BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $379/t CFR and remained largely stable with a mere $1/t drop w-o-w.

BigMint's assessment for bulk HMS (80:20) from the US east coast stood at $357/t FOB, slightly up by $1/t w-o-w.

Turkish rebar export prices stood at $580-583/t FOB. The scrap-to-rebar spread was assessed at $200-204/t FOB, largely stable as compared to last week.

Short-sea deals: Turkish imported short-sea scrap was priced at $358-360/t CFR, with recent transactions involving Romanian and Bulgarian HMS (80:20) at this rate. Mills targeted $350-352/t CFR for Romania-origin HMS (80:20), but sellers' offers ranged higher at $365/t CFR, which buyers found unfeasible.

Recent deals

• A US supplier sold to an Aegean mill at $380/t for HMS (80:20) and $400/t for shredded and bonus scrap on a CFR Turkiye basis.
  
  
• Three EU suppliers sold bulk HMS (80:20) at $370/t, $372.5/t, and $374/t CFR to mills in East Marmara, Aegean, and West Marmara, respectively.
  
  
• A Belgium-origin supplier sold 24,000 t of HMS, 6,000 t of shredded, and 10,000 t of PNS at $382/t (Average) CFR to a West Marmara mill.
  
  
• A UK supplier sold HMS (80:20) at $373/t and shredded at $398/t CFR to an East Marmara mill.
  
  
• Another UK supplier sold bulk HMS (80:20), shredded, and bonus scrap at $375.5/t and $400.5/t CFR to a West Marmara mill CFR Turkiye.
  
  
• A German supplier sold bulk cargo to an East Marmara-based mill comprising HMS(80:20) at $372/t CFR Turkiye.
  
  
• A couple of deals from the UK and Baltic-origin deals for HMS (80:20) were heard last weekend in the range of $373.5-$377/t CFR Turkiye
  
  

Steel market update: Turkish steel producer Kardemir reduced its billet prices by $5/t, setting S235JR at $545/t exw and B420 at $560/t exw. Despite selling at least 14,000 t, total sales are estimated at 20,000 t. Other Turkish suppliers are offering billets at $555-565/t exw, down $5-10/t from the previous week, due to sluggish demand for long steel. Import interest is low, with limited offers. Algerian semis are priced at $525-530/t CFR, and Asian material is slightly higher. CIS offers are scarce, with Donbas region billets at $515/t CFR for June shipment. Russian suppliers are not openly offering, with estimates at $520-525/t CFR. As per market insiders, the billets market is performing well and it won't get better." Import interest is low with limited offers. Participants were waiting for Kardemir's sales results. Their price, lower by $30/t, is a workable level for imports.

Consumer confidence in Turkiye remained stable in May compared to the previous month, with the seasonally adjusted index at 80.5 points, according to the Turkish Statistical Institute (TUIK). However, this level indicates a negative outlook, as optimism is typically seen above 100 points. Consumers are cautious, showing reluctance towards significant investments in residential property and vehicles. Economic conditions continue to be challenging, marked by declining house sales and vehicle purchases. High interest rates and elevated inflation further dampen prospects of near-term improvement.

Outlook: Turkish mills are expected to adopt a bearish stance until market conditions improve. Industry forecasts indicate a potential decline to below $370/t in the near term, fuelled by an improved collection rate among suppliers amid a sluggish domestic steel market in the US, which will be facilitating their scrap export market.