Turkiye: Imported scrap prices hit lowest level of CY'24 amid weak steel demand

• Turkish rebar demand weak despite price cuts
  
  
• US, EU firm at $350/t, resist further drops
  
  

The Turkish imported scrap market has ricocheted back to levels last seen in November 2022, with prices also hitting the lowest point of 2024 at $340-345/t CFR, on the back of the deals recently concluded from Europe and the Baltic region. Suppliers have been holding offers at around $350/t, resisting sharp market declines ahead of the restocking season.

Imported scrap prices started to fall in the second week of November, driven by weaker domestic and rebar export sales. The decline continued mid-week, with further bookings expected as mills return to the market.

Inquiries picked up as Turkish mills secured significant discounts. A Turkish trader commented, "More bookings are expected as negotiations continue with suppliers."

Market insiders are hopeful that prices will stabilise at the current levels.

A lack of domestic scrap demand in Europe, coupled with a weaker euro, has made dollar-denominated scrap offers from European recyclers more attractive.

Meanwhile, Chinese billet offers dropped to $450/t FOB ($485/t CFR Turkiye), prompting Turkish buyers to place bids for scrap below $350/t CFR.

Price assessment

• BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $343/t CFR, down by $15/t w-o-w.
  
  
• BigMint's assessment for bulk HMS (80:20) from the US east coast stood at $321/t FOB, down by 13/t w-o-w.
  
  

The scrap-to-rebar spread remains range-bound at $240-242/t as rebar export prices stood at $580-585/t FOB.

With European HMS (80:20) sales at $340/t CFR and billet at $485/t CFR, the spread between billet and scrap is around $100/t.

Commenting on the falling prices, a Turkiye-based trader said, "The market is very weak. Everyone expected a rebound earlier this month, but which failed to materialise."

A UK scrap yard owner expected Asian buyers to quote even lower, despite it being their restocking season and the pressure on prices to continue.

HMS collection costs in the Benelux region remained stable at Euro 280-285/t ($295-300/t) delivered. UK-based recyclers, however, indicated a bearish near-term price range for EU-origin HMS (80:20) at $332-336/t CFR, with collection costs in the UK reported at GBP 210-220/t ($265-278/t) delivered.

US suppliers sold HMS (80:20) at $350-352/t CFR Turkiye, aligning with the downward trend. In contrast, European suppliers resisted bids below $350/t CFR, citing strong dock prices and unfavourable euro-dollar exchange rates.

The Turkish lira's depreciation to TRY 34.5/USD added pressure on imports. Mills have lowered domestic buying prices, and buyers remain reluctant to exceed $350/t CFR, even for premium US grades.

Imported scrap deals

• A Polish supplier sold HMS (80:20) to a buyer in East Marmara at $356/t, for mid-December shipment.
  
  
• A Baltic supplier closed a deal of HMS (80:20) with a buyer in East Marmara at $354/t, for mid-December.
  
  
• A US supplier sold HMS (80:20) to a buyer in the Mediterranean region at $353/t, also for mid-December shipment.
  
  
• A UK seller sold HMS (80:20) to a Mediterranean buyer at $340/t for December.
  
  
• A December deal from Germany for HMS (80:20) was closed with a buyer from the Aegean region at $344/t.
  
  
• A Swedish supplier sold HMS (80:20) to a buyer in West Marmara at $345/t, for December shipment.
  
  

The short-sea market also saw a sharp price decline, with a sale from Romania at $325-330/t CFR Turkiye, down from $335/t CFR just a day earlier, amid downward pressure as Turkish mills restock and limited market participation at higher price.

Shipbreaking prices soften

The Turkish shipbreaking scrap market softened amid weak demand and oversupply as shipbreaking scrap prices dropped to $360-365/t delivered, a decline from $370-380/t the previous week.

Price cuts fail to boost demand for Turkish Rebar

Despite price cuts, Turkish steelmakers continue to struggle with weak rebar demand. Kardemir, an integrated steel mill, reduced its prices by TRY 505/t ($19/t) recently but only managed to secure orders for 11,000 t of rebar.

The Turkish long steel market remains sluggish, with rebar prices dropping to $585-605/t ex-works, down from $595-615/t last week. Some stockists in western Turkiye are offering as low as $580/t. Mills are struggling to sell in domestic and exports.

Export offers declined to $580-585/t FOB for December shipment, and mills in Turkiye may need to offer deeper discounts to remain competitive. Weak finished steel demand has also led Izmir Demir Celik to temporarily halt one of its electric arc furnaces (EAF) for maintenance until mid-to-late December, intensifying challenges for mills.

Outlook

The outlook is mixed. Some players think prices are close to hitting the bottom and could start recovering soon, based on past trends. Others expect prices to keep falling because of weak demand and oversupply. A recovery might depend on stronger demand from Europe and better economic conditions in early 2025.

For now, mills are lowering scrap prices to stay competitive, which is putting more pressure on the market. With few orders for December, Turkish mills may continue to drop rebar prices, which will likely lower scrap prices further.