Turkiye: Imported scrap prices rise over $30/t w-o-w in recent deals post holidays

Imported scrap consignments in Turkey rebounded after market participants resumed buying post holidays. Prices continued to recover alongside tight supply. Meanwhile, a few suppliers are expected to return to the market next week.

Imported scrap prices increased significantly by $25-30/t in recent transactions. SteelMint's daily assessment for HMS 1&2 (80:20) from the US stood at $415-420/t CFR Turkey.

Recent deals:

• In a recent deal, European scrap suppliers booked HMS (90:10) at $421-422/t CFR to a Black Sea region-based steel mill.
  
  
• Another European scrap supplier sold HMS (80:20) at $412.5/t CFR to a Western Maramara-based steel producer.
  
  
• Two Benelux-origin cargoes have been booked at $408/mt CFR Aegean and $409/mt CFR West Marmara.
  
  
• A Mediterranean region-based steel mill has booked a European bulk cargo comprising 30,000 t HMS (80:20), 5,000 t shredded, 5,000 t P&S and HMS 1 scrap at an average price of $402/t CFR Turkiye, SteelMint learnt from sources.
  
  

As market activities resume, suppliers are likely to target offers at around $430/t levels in expectation of increasing workable prices. Deep-sea scrap prices in the country continued to rise due to limited availability for February shipments.

Ferrous scrap imports drop 8% m-o-m

The country's scrap imports were recorded at 1.33 mnt in November, down slightly by 8% m-o-m from 1.44 mnt in October. Interestingly, imports hit their lowest level since July 2020.

Imports decreased due to weak finished steel demand in both the domestic and international markets, while increased input costs also impacted production, with capacity utilisation falling to 51% in November. Rebar exports fell by 25% m-o-m in November to 326,954 t from 437,950 t in October. Rebar exports decreased by 21% to 6.41 mnt in January-November as against 8.15 mnt in the year-ago period.

Domestic market scenario

• Rebar prices rise: Turkish steelmakers started 2023 with a further revision in rebar prices, supported by healthy sentiments in the imported and domestic scrap markets. Most steel producers have increased their rebar prices by $20?25/t since late December. Rebar offers are now ranging within $700-715/t exw depending on the region. Although, mills are generally targeting the upper limit of this range.
  
  
• Govt eases energy tariffs: The New Year has brought a whiff of fresh air to Turkiye's steel producers who have been suffering for months from skyrocketing energy tariffs. With the government easing energy tariffs, the cost pressure on mills will ease which can be a positive factor for competitive prices in both local and overseas markets. New electricity tariffs in Turkey have decreased by 16% for high-demand commercial users (down to TRY 3.63). The regulators also zoomed down the maximum price of electricity in the free market.
  
  

This step is expected to result in a 10-15% reduction in electricity cost for the steel industry. Market participants stay cautiously positive about the changes, given the already drastic reduction in capacity utilisation of steel mills.