Turkiye: Imported ferrous scrap prices rise $2/t w-o-w; inquiries to rise post-Eid break

Turkish imported ferrous scrap prices from the US and Europe witnessed a slight rise of $2/t w-o-w with no market activities seen throughout this week amid the Eid-Al-Adha holidays.

Post-holidays some recyclers are expecting renewed activities in the market and preparing to return for the rest of July shipment cargoes.

As per market sources, frequent bookings may resume towards the last couple of days of this week with notable business anticipated during the fourth week of June'24.

Supplier-side sentiment: The European steel market is in a downtrend, with this year's slowdown starting even before summer. While demand for existing stock remains stable, new orders are lacking. Hopes for a pick-up after the European elections and safeguard quota announcements did not materialize, despite recent price hike attempts by steel mills.

European recyclers report limited scrap supply due to low collections, domestic demand, and demand from the Middle East, particularly Turkiye, which supports deep-sea scrap prices. Indicative prices for European-origin HMS (80:20) are heard at $383-$384/t CFR Turkiye, potentially reaching $385/t in the coming days.

Other suppliers expect the market to remain quiet this week, with Turkish mills likely to consider bookings next week. A US scrap supplier mentioned about targeting $388-390/t CFR Turkiye for US-origin HMS (80:20), noting that increased freight costs are driving up prices.

BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $386/t CFR, an increase of $2/t w-o-w.

Despite these expectations, rebar prices remain stagnant at around $578-580/t FOB Turkiye, with some deals reported at nearly this level.

BigMint's assessment for bulk HMS (80:20) from the US east coast stood at $358/t FOB, slightly down by $1/t w-o-w.

The scrap-to-rebar spread was assessed at $192-194/t FOB, narrower compared to last week.

Ekinciler's green initiative: Turkish steel producer Ekinciler, based in Iskenderun, is exploring a green initiative with a proposed investment of TRY 743.7 million (approximately $22.8 million) in a solar power plant located in Sanliurfa province. The plant, spanning 84.3 hectares, aims to achieve a capacity of 88.5 MWm (60 MWe), enhancing the company's energy independence pending regulatory approval. Construction is scheduled to commence in September 2024, with an operational lifespan of 25 years, extendable based on technological advancements.

Additionally, Ekinciler plans a significant expansion in steel production, aiming to increase liquid steel production to 2.04 million tonnes per year and rolling capacity to 1.94 million tonnes per year. Originally targeted for completion in Q4 2023, the expansion project awaits official confirmation.

Turkish automotive sector: In May 2024, the Turkish automotive sector faced significant challenges, resulting in a 3.7% year-on-year decline in production to 131,956 units, as reported by the Turkish Automotive Manufacturers' Association (OSD). Despite a slight increase in passenger car output to 91,823 units, domestic sales saw a notable decline of 9.7% to 104,959 units. Exports also experienced a downturn of 1% to 85,162 units, while imports decreased by 2.2% to 72,803 units.

From January to May 2024, Turkish automotive production totalled 606,905 units, marking a 1.5% decrease compared to the same period in the previous year. The commercial vehicle segment notably struggled with a 7% decline, including drops of 6% in light commercial vehicles and 12% in heavy commercial vehicles. However, domestic sales showed resilience with a 5.4% increase to 491,482 units. Exports recorded a modest rise of 0.6% to 417,826 units, while imports surged by 17.4% to 331,484 units, according to OSD data.

Outlook: Suppliers expect a stable market environment, noting that Turkish mills have already secured approximately 18-20 cargoes of deep-sea scrap and a slight rise in EU-origin scrap offers due to low collection rates.