Turkiye: Imported ferrous scrap prices remain largely stable w-o-w; market expects pre-Eid restocking

• Strong demand from mills ahead of holidays to sustains prices
  
  
• Europe maintains firm prices for premium grades on tight availability
  
  
• Mills secure 30-plus bulk vessels for late June, early July shipments
  
  

Turkiye's import scrap prices remained largely stable as mills are relatively interested in the current price ranges. Despite a strong restocking in late May, Turkish mills continued inquiring. This demand is attributed to an upcoming holiday in mid-June, which may limit market activity. Market participants expect prices to remain range-bound as there is equilibrium in the short-sea space. Mills cannot raise prices, and suppliers cannot lower either. This translates into a stalemate with minor fluctuations.

Turkish steel producers began their deep-sea bookings last week to replenish July stocks and are expected to continue in the short term. The demand for finished long steel products in domestic and export markets is expected to drive scrap purchases.

Scrap suppliers are reluctant to provide further discounts due to the sluggish material flow to their yards. An industry source mentioned that a UK scrap collector temporarily increased dockside prices for a week, but this hike did not translate into increased sales.

Recent deals:

• US-origin bulk HMS (80:20) and shredded were booked at $380/t and $400/t respectively by an Aegean region-based mill, CFR Turkiye.
  
  
• EU-origin bulk HMS (80:20) cargo was booked at $372/t by an East Marmara-based mill.
  
  
• Europe-origin bulk cargo of 24,000 t of HMS (80:20) was booked by a West Marmara-based mill at $372.5/t and 6,000 t of shredded and 10,000 t of PNS at $396/t each.
  
  
• A Russian supplier sold bulk HMS(80:20) at $372.5/t to an Aegean region-based mill.
  
  
• A US-origin supplier sold bulk HMS (95:5) at $385/t and shredded at $399/t to a Mediterranean region-based mill.
  
  
• A Baltic origin supplier sold a bulk cargo of HMS (80:20) to an Aegean region-based mill.
  
  

Turkiye's automotive sector, a major steel consumer, saw a significant m-o-m increase in May sales despite a y-o-y decline. In May, sales of passenger cars and light commercial vehicles reached 100,305 units, a 32.1% increase compared to April.

Compared to May 2023, sales dropped by 10.1%. Passenger car sales fell by 8.2% to 80,260 units, while light commercial vehicle sales decreased by 17% to 20,045 units. Despite the yearly decline, May 2024 sales were 45.7% higher than the average sales for May over the past decade, indicating a strong performance.

Outlook

Turkish mills expect scrap prices to remain stable, but under pressure, at around $380/t CFR. US weak domestic buy sentiments may lead to lower obsolete scrap prices, potentially influencing softer export offers from the US. Sellers face challenges in pushing prices above current levels due to iron ore price impacts, suggesting a sideways trend with minimal fluctuations expected in the near future.