Turkiye: Imported scrap prices edge up w-o-w despite limited activities; steelmakers cautious amid dull demand

Turkish imported ferrous scrap prices inched up slightly as sellers anticipated a restocking surge. Despite a brief market pause, the bullish sentiment was revived by Turkiye's leading steelmaker, which slashed its rebar list prices, driving up demand.

BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $382/t CFR and witnessed a minor upward fluctuation of $4/t from last week.

BigMint's assessment for HMS (80:20) bulk export price from the US East Coast stood at $355/t FOB, down by $2/t w-o-w.

Forecast from buyers: Imported scrap prices are expected to hold steady until early April, but a currency shock could trigger an increase in the next 2 to 3 months, driven by anticipated growth in finished product exports. Despite stable finished steel demand, overall market conditions for end-products remain weak. Observers anticipate a 10-30% currency depreciation, translating to TRY 35-40 against the dollar in the coming months.

Another Turkish mill source predicts the next deal could occur at $380-385/t CFR, but expects prices to rise swiftly afterward due to vessel needs.

Midweek, Turkiye's steelmakers continue to delay imported scrap bookings, opting to assess the situation. Reluctance to cooperate led to rare fresh transactions in the ferrous scrap segment. Despite the need for raw materials for the April shipment, Turkish mills are cautious about purchasing additional volumes due to a lack of support from finished steel demand, while overall activity remains subdued. Scrap collectors refrained from setting firm offers, awaiting market clarity.

Dock price: European dock prices for HMS are at Euro 310/t and shredded/bonus at Euro 340/t, up by Euro 5/t from the previous week. Shortsea HMS (80:20) offers range from $370-$375/t CFR, but Turkish mills are cautious about accepting prices above $360/t CFR.

Recent deals:

A Swedish-origin bulk scrap shipment was booked by a West Marmara region based mill at $382/t for HMS(80:20) and $402/t for shredded and bonus scrap on a CFR Turkiye basis.

A US-origin supplier sold to a West Marmara-based mill for $382/t HMS (80:20) CFR Turkiye.

A Russian supplier sold a bulk shipment to a West Black Sea region steel mill comprising 20,000 t of HMS (95:5) at $395/t CFR Turkiye

An Aegean region-based mill booked US-origin HMS (80:20) bulk cargo at $381/t on a CFR Turkiye basis.

Another Aegean region-based mill booked European bulk cargo comprising HMS (80:20) at $379/t and shredded-bonus at $399/t CFR Turkiye.

Finished and semi-finished market updates: As per a few market participants, both local and overseas demand for Turkish-finished steel remained weak due to declining Chinese steel prices, geopolitical tensions, and the traditional slowdown in steel demand during Ramadan. Recent volatility in the Turkish currency has added to market uncertainty. Turkish suppliers kept long steel prices stable compared to the previous week. Turkish rebar export prices held steady at $590-595/t FOB for April shipment, while wire rod export offers are around $605-615/t FOB.

BigMint's weekly rebar assessment stood at $590-595/t FOB Iskenderun. The scrap-to-rebar spread has narrowed down to $210-213/t as of now.

Kardemir secures orders: Turkish steel producer Kardemir secured medium rebar orders domestically, while overall trading activity remains minimal in the longs sector. Kardemir's recent rebar sales saw a decline of TRY 490/t ($7/t) compared to the previous round, with offers at TRY 23,640/t ($608/t) exw which were swiftly accepted by the market. Other Turkish steelmakers priced domestic rebar at $590-620/t exw, with subdued demand and no discounts provided due to high costs.

Additionally, Kardemir reduced wire rod sales prices by $15/t, offering 5.5 mm SAE 1008-1010 wire rods at $620/t EXW. The company's revised price list includes rebar sizes ranging from 12 to 32 mm at TRY 19,700 ($609)/t and a $15/t reduction in the price of 5.5 mm SAE 1006 grade wire rod to $630/t exw compared to last month's figures.

Tosyali wire rod unit nears completion: A major Turkish steelmaker is nearing completion of a wire rod project in Iskenderun, Hatay province. The new mill will have 2.5 times higher wire rod output potential, focusing on high-quality plain and ribbed wire rods. Cold tests have been initiated, with full start-up expected by year-end. The investment aims to serve local industrial zones and export markets, contributing to retaining $7 billion in foreign currency within Turkey. Tosyali operates 30 manufacturing plants globally, with an annual capacity exceeding 10 million tonnes, including a 600,000 tpy wire rod mill in Osmaniye.

Colakoglu Metalurji upgrades HSM: A major Turkish steelmaker, recently upgraded its hot strip mill (HSM) in Kocaeli, achieving unparalleled rolling stability and high-quality production. The 3 million tpy complex now offers improved strip flatness and coil shape, requiring less maintenance. The upgrade, carried out in cooperation with the SMS group, included advanced strip steering technology for real-time feedback. The project was completed during regular shutdowns without additional downtime. Colakoglu Metalurji's facilities include HRC production with a capacity of 4.5 million tpy, along with capabilities for billets, slabs, blooms, and rebar production.

Outlook: Towards the month-end, $388-390/t levels might be seen, as approximately 16-18 deals have been secured for April shipment. And there is an anticipation of more than 40% yet to be traded. Steel mills foresee a slight upward movement in prices despite the prevailing market weakness for end-products. Market watchers anticipate a resumption of activity late this week or early next week, with varying expectations on pricing. Some foresee acceptance below $380/t CFR, while others might adopt a wait-and-see approach.