Turkiye: Imported scrap prices rise by $6/t w-o-w; mills resist higher offers, delay negotiations

• Dock collection prices in Europe up Euro 7-8/t
  
  
• Mills await clearer signals on acceptable scrap price levels
  
  

The Turkish imported scrap market witnessed a rising trend in prices as Turkish steelmakers have been gradually restocking imported scrap.

As per market insiders, the restocking trend is ongoing, but at a slower pace, driven by cautious sentiment in the market.

After a busy 3 to 4 days of continuous deals towards the second half of the current week, the market showed signs of sluggishness, with negotiations remaining slow as Turkish mills are not rushing to conclude deals despite their need for material to fulfil January requirements.

Notably, around 10 deals were heard concluded in the last seven days at the $344-350/t range, primarily from Europe.

According to a market source, "rebar demand is not that active, and price growth has stalled, leading mills to slow down their purchase."

Assessments

• BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $351/t CFR, up by $6/t w-o-w.
  
  
• BigMint's assessment for bulk HMS (80:20) from the US east coast stood at $324/t FOB, up by $4/t w-o-w.
  
  

The scrap-to-rebar spread remains rangebound at $224-225/t as rebar export prices stood at $570-575/t FOB.

Some Turkish mills remain in a wait-and-see mode, with around 10 cargoes still needed for January but hesitant to commit at current prices. A Benelux recycler noted mills are cautious due to the rising scrap prices, while rebar prices are falling.

Scrap collectors are reportedly holding off on firm offers and awaiting clearer signals on acceptable prices levels.

Dock collection prices in Europe rose to Euro 282-283/t, up Euro 7-8/t from last week, due to winter conditions and the approaching holidays. European winter holidays for 2024-25 are set for France, Germany, Italy, Spain, and the UK (majorly from December last week to the first week of January).

Rebar demand in both the domestic and export markets has softened, leading mills to delay fresh purchases of raw materials. This sentiment was echoed by a Turkish mill source, who stated, "We have already made our purchase, and we are no longer in the market. The price is too high now, and it may come under pressure soon."

Rebar prices have softened both domestically and for exports, putting additional pressure on scrap prices. Turkish rebar export prices were assessed at $570-378/t FOB, whereas Marmara mills were offering rebar at $580-585/t FOB, while Northern European buyers were only willing to pay $535-$540/t FOB. The widening gap between offers and bids has led Turkish mills to scale back on scrap purchases.

Asian billet prices fall as market sentiment weakens

Asian billet prices dropped in the mid-week with Chinese offers reduced to $445-446/t FOB. The weakening demand and disappointing economic signals led to a fall in prices and halted major transactions in Southeast Asia.

US CVD review on Turkish rebar

The US Department of Commerce's preliminary countervailing duty (CVD) review for Turkish rebar has resulted in a 2.54% duty for Colakoglu and Kaptan. However, Icdas received a "de minimis" subsidy rate of 0.14%, meaning it may avoid the CVD if this rate holds below 0.5%. The review for six other Turkish companies was rescinded due to a lack of evidence of rebar sales to the US.

Real estate growth to drive steel demand

Turkiye's housing market saw a remarkable 63.6% y-o-y increase in November sales, particularly in mortgaged transactions. This strong recovery in the real estate sector is expected to boost steel demand as construction activity gains momentum in the coming months.

Outlook: The Turkish scrap market is expected to remain subdued in the near term. Weak rebar demand, the approaching year-end holidays, and higher collection costs in Europe are slowing down market activity. Mills have secured some of their January raw material needs and are unlikely to make new purchases unless prices drop significantly. While sellers may hold firm due to supply-side pressures, mills could gain leverage if rebar demand continues to weaken, potentially leading to lower scrap prices. Market participants are awaiting further transactions to attain clarify on price direction.