Turkiye: Imported ferrous scrap prices witness slight drop by $1/t w-o-w; buyers adopt wait and watch approach

Turkish imported ferrous scrap prices experienced a slight decline of $1/t w-o-w, driven by efforts from mills to push prices down. Turkish buyers booked around 25-27 deep sea bulk vessels for late March for late April and early-mid May shipments from Europe, the US, and the Baltic regions. This could put upward pressure on prices if demand unexpectedly surges. Continued monitoring of supply chain developments is crucial.

Despite attempts by Turkish mills to negotiate softer prices, sellers maintained firm positions, citing increased collection costs in Europe and expectations of stability in the ongoing US domestic scrap buy week.

Sellers maintained their firm stance due to increased collection costs and reduced margins. Offers for HMS (80:20) from Europe stood at $385/t CFR, while those from the US were priced at $390/t CFR. Turkish mills expressed limited appetite amid upcoming holidays, with Turkiye entering a public Ramadan Bayrami holiday period from 9 April to 12 April.

• BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $389/t CFR, a slight drop of $1/t w-o-w.
  
  
• BigMint's assessment for bulk HMS (80:20) from the US East Coast stood at $366/t FOB, remain stable w-o-w.
  
  
• BigMint's weekly rebar assessment stood at $595/t FOB Iskenderun. The scrap-to-rebar spread has increased to $205-206/t as of now.
  
  

US domestic steel market: Market participants anticipate a sideways to slightly positive trend in the US domestic steel market during the early trading period of April. Overall activity is expected to remain subdued, but some positive signs are emerging. Several steel mills have recently concluded maintenance shutdowns and are resuming production. This is expected to lead to a rise in buying activity compared to March levels. This could potentially stimulate market movement. While the situation is improving, tight steel inflows remain a concern.

Collection cost: Collection costs for HMS in the Benelux region ranged from Euro 310-320/t delivered to the docks, with some reports as high as Euro 325-330/t delivered to the docks. HMS collection prices in the Baltic region were reported at Euro 315/t delivered to the docks.

Turkish domestic steel market-

High interest and inflation rates in Turkiye limited construction activity and the steel trade, discouraging mills from raw material purchases. Turkish steel producers revised their domestic scrap prices at the end of March, albeit with minor effects on dollar-denominated marks due to ongoing lira devaluation. Despite some steelmakers increasing their lira-based purchase prices for local scrap, overall market sentiment remained cautious. April began with a silent market atmosphere as Turkish producers evaluated market prospects amidst municipal elections and upcoming religious holidays.

Colakoglu Metalurji: Colakoglu Metalurji remains positive about 2024, focusing on improving positions both locally and abroad. The company aims to address challenges posed by the foreign steel influx and squeezed margins through focusing on quality steel production and expanding cooperation with various manufacturing sectors. Efforts on sustainability and carbon emissions reduction are also prioritised, aligning with global environmental goals. Prospects for the rest of the year are optimistic, with expectations of a normalisation trend in economies in the second half of 2024. Colakoglu Metalurji's flat and long steel facilities, including HRC production with an annual potential of 4.5 mnt, position the company for growth and market resilience.

Outlook: Turkish buyers aimed for European cargoes at $380/t and US cargoes at $385/t CFR, however, mills still required five to six more cargoes for the late-April and May shipment, which could potentially be booked prior to the holidays by the end of the week.