Turkiye: Imported ferrous scrap prices head north; trade frequency increase w-o-w

Turkish scrap import prices are rising due to supply pressure. September shipments are being booked and prominent Turkish producers are actively restocking due to the understanding that suppliers will maintain their firm stance, eliminating the need for further wait. Negotiations are currently ongoing in the ferrous scrap segment.

US-origin bulk HMS 1&2 (80:20) prices increased by $15/t w-o-w to $370/t CFR, up $10/t from last month's $360/t. SteelMint data shows rebar prices are range-bound w-o-w at $575-580/t FOB, maintaining the scrap-rebar price gap at $200-205/t.

Low scrap flow and active overseas scrap sales by Benelux suppliers are pushing prices up. The local market is also strengthening.

Recent deals:

• US-origin supplier sold HMS(80:20) at $371 and $372/t to a Black Sea region mill on a CFR Turkiye basis.
  
  
• Short and Baltic suppliers sold HMS(80:20) at $370/t and bonus at $390/t to Mediterranean mill CFR Turkiye.
  
  
• Danish supplier sold HMS(90:10) at $382/t to West Black Sea Mill CFR Turkiye.
  
  
• Dutch supplier sold 20,000 t HMS(80:20) at $370/t, 4,000 t bonus at $390/t, 4,000 t shredded at $395/t to Aegean Mill on CFR basis.
  
  
• Mediterranean mill booked 30,000 t Northern European bulk cargo - HMS(80:20) at $356/t, and busheling at $381/t CFR Turkiye.
  
  
• US-origin cargo with 23,000 t HMS(80:20) was booked at $367/t, 5,000 t shredded, and 2,000 t bonus at $387/t each, sold to an East Marmara mill on CFR basis.
  
  
• Aegean Turkish mill reserved 25,000 t from Northern European suppliers - 20,000 t HMS(80:20) at $364.50/t CFR, 5,000 t bonus at $384.50/t CFR.
  
  
• Mediterranean mill booked HMS(80:20) from European supplier at around $368.50/t CFR.
  
  

Domestic market-

The Turkish local scrap market experienced a reversal. Domestic steel producers are raising scrap prices due to higher import rates. The majority of Turkish steelmakers increased purchase prices for local scrap, leading to quotes rising by TRY 100-400/t ($4-15/t), depending on location and material grade. This rise is driven by stronger import scrap sentiment, leading to strengthened finished steel product prices.

Although some restocking is visible in the Turkish domestic rebar market, it does not signal a lasting change in the construction sector's fundamentals. Additionally, Turkish mills are facing challenges in the competitive export rebar market.

The Turkish lira stood at TRY 27.10 against the greenback continuing its downfall amid weaker economic conditions and lowered foreign reserves.

Uncertain billet market despite strong Kardemir sales: The Turkish billet market improved during the week fuelled by recent semis sales by Kardemir. Some market participants are optimistic about further positive developments due to higher scrap costs and the long steel sector. Amid rising prices and active scrap deals, both domestic and foreign demand for billets and longs is evident, although some foreign buyers have unrealistic price expectations.

Export rebar prices rise despite limited sales: Turkish export rebar prices continue to climb due to increased import scrap quotes, while local prices remain steady. Despite the price uptrend, buying interest from both domestic and foreign clients is not satisfactory. Turkish long steel producers have raised their rebar export offers by $15/t recently, citing higher production costs. However, sales remain constrained.

Turkish residential sales increase by 17% in July: Turkiye's real estate market, a significant consumer of steel, experienced a 17% increase in residential sales in July. Although this narrows the annualised backlog, demand is still below desired levels, posing concerns for steel suppliers. In July, house sales reached 109,548 units, marking a 16.7% y-o-y growth, according to the Turkish Statistical Institute (TUIK).

Outlook: As per market forecast, demand by Turkish mills is expected to remain robust, with indications pointing to a requirement of more than 20 cargoes in the ongoing booking phase. This projection hints at a sustained need for scrap materials to support the country's steel production.