Turkiye: Imported scrap index range-bound w-o-w ; buyers in wait-and-watch mode

The Turkish imported ferrous scrap index remained largely stable with slight fluctuations in mid-week with indicative levels at $390-391/t CFR levels, reflecting comparatively lesser activities in the market. At the start of the week, limited market activity was observed due to the Turkish Democracy and National Solidarity public holidays.

Market sources also said collection costs for HMS in the Benelux region were at a minimum Euro 320/t delivered to docks although the market remained stable amid holiday-induced quietude, with little fundamental changes noted, aside from these factors.

Despite competitive offers from suppliers in the US and Baltic regions, buyer interest remained restrained, contributing to the overall muted trading environment.

Overall, the week saw a pause in trading activities as Turkish mills opted for a wait-and-watch approach, seeking clarity on market trends before making significant procurement decisions. The stable scrap prices amidst varied sourcing options highlighted the strategic decision-making process within the Turkish steel industry amid current economic conditions.

Meanwhile, attention shifted towards Chinese billet imports, which saw offers ranging between $500-520/t CFR for September- October shipments. This indicated that Turkish mills are considering alternative sourcing strategies amid stable scrap prices. These Chinese offers are attractive and pose a potential challenge to demand for imported scrap.

In a recent deal, A Swedish bulk cargo with HMS (80:20) and shredded scrap was booked by a West Marmara mill at $390/t and $410/t CFR Turkiye respectively.

In the export segment, Turkish rebars continued to face sluggish demand, with prices holding steady at $575/t FOB. This reflected ongoing caution among European buyers and a general tepidness in market sentiments.

Assessment trends:

• BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $391/t CFR, up by $1/t w-o-w.
  
  
• BigMint's assessment for bulk HMS (80:20) from the US East Coast stood at $361/t FOB, down $2/t w-o-w.
  
  

The scrap-to-rebar spread was assessed at $189-190/t FOB, range-bound compared to last week.

Turkiye's real estate market faced challenges in June 2024 amid economic pressures and the festive period, resulting in a 5.2% annual decline in residential property sales to 79,313 units. Istanbul led with 13,025 units sold, followed by Ankara (6,866 units) and Izmir (4,361 units). Mortgage-backed transactions plummeted by 49.4% y-o-y to 6,813 units, reflecting limited banking sector support. Second-hand home sales decreased by 6.7% to 53,888 units, constituting 67.9% of total sales. Year-to-date figures showed a 3.7% decline to 545,074 units, with first-time transactions up 1.3% and second-hand sales down 5.8%. Foreigners' property purchases dropped by 45.1% in June to 1,440 units, with Russian buyers leading at 332 units.

Chinese electric-car giant BYD has inked a $1 billion investment deal with Turkiye to establish production and R&D facilities in Manisa, aiming to manufacture 150,000 electric and hybrid autos annually starting late 2026. Overcoming import barriers, this move facilitates BYD's entry into Turkiye's market and enables potential exports to Europe. The investment, supported by Turkiye's incentives, seeks to bolster local production capabilities and tap into Europe's growing demand for electric vehicles. Further investments by other Chinese brands in Turkiye's automotive sector are anticipated, buoyed by the increasing popularity of electric vehicles in the region.

Outlook: Market dynamics indicated strong near-term demand from Turkish mills for several August shipments. However, buyers faced challenges in negotiating lower prices as sellers in the Benelux region encountered slow scrap inflows and higher collection costs. Despite upcoming strong demand, a significant pricing gap persists due to the strengthening Euro that might affect dollar-denominated offers.