Turkiye: Imported ferrous scrap volume drop nearly 15% y-o-y in 10MCY23 amid weak steel demand

Turkiye's ferrous scrap imports decreased by 14% to 15.56 million tonnes (mnt) in the first ten months of CY'23, compared to 18.06 mnt in 10MCY'22, as per customs data. Notably, exports declined from the UK, a major supplier, due to lesser volume during mid-year and towards the end of the year.

Import volumes showed a mixed trend as volume remained low in January, February, June, and September months as Turkish mills remained skeptical of better steel demand in the market owing to inflation and a high-interest rate, followed by a disturbance during an earthquake.

Import volumes touched a peak in March 2023 (2.34 mnt) in the last six months as Turkish mills began procuring for reconstruction activities after the earthquake occurred on February 2023.

Meanwhile, Turkish steel producers struggled to maintain normal operations following the weak steel sector and a fluctuating currency rate in the last couple of months. Both domestic and international steel demand remained low, which impacted scrap import volumes, though import prices from the US in bulk continued a downtrend because of a lack of interest from the mill side.

The country imported 1.49 mnt of ferrous scrap in October 2023, an increase of 39% m-o-m compared to 1.07 mnt in September. Scrap imports are also hiked nominally by 3% y-o-y against 1.44 mnt in October 2022.

• Billet imports: Turkiye's steel billet imports rose by 28% y-o-y to 4.90 mnt in 10MCY23 (Jan-Oct'23) as against 3.84 mnt in the year-ago period, as per customs data. Russia was the major exporter with 2.57 mnt followed by Algeria with 0.44 mnt. Similarly, import volumes increased by 12% m-o-m to 317,053 t in Oct from 420,048 t in Aug.
  
  
• Rebar exports: Turkiye's rebar exports dropped by 45 % y-o-y to 3.33 mnt in 10MCY23 (Jan-Oct'23) as against 6.08 mnt in the year-ago period, as per Customs data. Israel was the top finished-long importer at 878,512 t followed by Yemen at 610,969 t during the period. However, export volumes declined by 17% m-o-m to 389,993 t in Oct'23 from 283,832 t in Sep'23.
  
  

Country-wise shipments

Imports from Lithuania drop by 33% in 10MCY'23: Shipments from Lithuania decreased by 33% in 10MCY'23 to 0.64 mnt y-o-y as compared to 0.96 mnt in 10MCY22. Imports remain largely stable at 0.05 mnt in Oct'23 as compared to 0.05 mnt in Sept'23.

Shipments from the UK decline 26% in 10MCY23: The UK exported 1.17 mnt of scrap to Turkiye in 10MCY'23, down 26% compared to 1.58 mnt in 10MCY22. Similarly, m-o-m volumes in June decreased significantly by 33% to 0.06 mnt from 0.09 mnt in September, the third lowest volume in the last ten months after 0.02 mnt in June and 0.05 mnt in February.

Imports from the US up 3% in 10MCY'23: Turkiye's imports from the US saw a 3% uptick, reaching 3.63 mnt, maintaining the US's position as the leading exporter to Turkiye. On a m-o-m basis, a 27% rise was seen in total import volume during October (0.38 mnt) as compared to 0.30 mnt in September 2023. Notably, after experiencing declines in January, February, and June, there was a significant rebound in July, with import volumes surging by 148% m-o-m to 0.62 mnt from 0.25 mnt in June. Throughout the first ten months of CY'23, March, May, July, and October stood out with stronger import volumes from the US compared to other months.

Key updates

• Crude steel output declines: Turkiye's crude steel production was recorded at 27.42 mnt in 10MCY'23, down 9% compared to 10MCY'22, as per World Steel Association (WSA) data.
  
  

• Lira falls: The value of the Turkish lira dropped to 27.48 in October from 18.68 in January.
  
  

Outlook

Turkish mills are expected to procure actively towards the last two months, mainly due to winter restocking. Hence, it is expected that import volumes may touch 18.5 mnt towards the end of CY'23. Continuous bulk deals from the US and EU, on the other hand, are expected to push up bulk scrap prices.