Turkiye: Imported scrap prices stable w-o-w while bearish outlook prevails amid soft steel demand
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Turkish imported ferrous scrap prices remained largely stable, although firm offers from suppliers were heard at around $394-395/t for US-origin scrap.
On the other hand, market insiders indicate that downward pressure from local mills persists, pushing bids lower to $384-385/t amid declining imported iron ore prices into China.
As per Turkish buyers, billet import from China has extra duty which will restrict steelmakers to buy Chinese billet easily.
Despite bearish sentiment among buyers, US offers remained firm at $393/t CFR and the workable price for US and Baltic-origin HMS (80:20) hovered between $385-388/t CFR.
Turkish steelmakers have been actively restocking their scrap supplies for July and August but the domestic market for finished steel remains weak amidst the country's financial difficulties.
Collection cost: In the Benelux region, European recyclers reported collection costs at Euro 322-325/t delivered to docks with efforts to reduce costs up to Euro 315/t to match current export prices. Market concerns persisted that reducing costs below Euro 320/t could disrupt the flow of scrap into the market.
Assessment trends:
BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $390/t CFR, range-bound w-o-w.
BigMint's assessment for bulk HMS (80:20) from the US East Coast stood at $364/t FOB, down $2/t w-o-w.
The scrap-to-rebar spread was assessed at $188-190/t FOB, unchanged compared to last week.
Recent deep-sea deals:
- A European supplier sold a bulk cargo comprising HMS (80:20) at $384/t CFR Turkiye to a Samsun region-based mill.
- A supplier based in north Europe sold a bulk HMS (80:20) cargo again at $384/t CFR to a mill in the Osmaniye region in Turkiye.
- A France-origin supplier sold HMS (80:20) at $387/t CFR Turkiye for late-July shipments to an Aegean region-based mill.
- A Finland-origin supplier sold HMS (80:20) at $388/t, bonus scrap at $408/t CFR Turkiye, late-July shipments to the same mill.
- Another UK-based supplier sold HMS (80:20) at $384/t CFR Turkiye, mid-August shipments to East Marmara-based mill.
Short sea deals: In other regions, shortsea deals were reported, including HMS (80:20) scrap from Romania at $368-370/t CFR and a Croatia-origin deal ranging between $378-380/t CFR, with the exact duration of the trade remaining unclear.
Domestic steel market: Long steel producer Kardemir launched its domestic rebar sales at TRY 23,460($715) /t ex-works for 12-32mm material, including 20% VAT, on Wednesday. The company swiftly sold 20,000 t and closed its sales recently. Market sources mentioned that the demand for Kardemir's rebar is due to its favourable payment terms.
As per other mill-related sources, overall demand in the domestic market remains weak. Despite rising production costs, Turkish domestic rebar prices are under pressure due to sluggish business activity. ICDAS reduced its rebar and wire rod prices to $610/t exw Biga and $621/t CFR Marmara, while other mills maintained their offers with indications that negotiations could happen at $600/t exw. Prices from other Turkish suppliers have held steady at $585-610/t exw since last week, reflecting limited but need-based demand.
Domestic scrap prices in Turkiye remained largely stable with minor changes since last week, although some mills increased their purchasing rates for auto bundle scrap. A steel mill in Izmir raised its buying price by TRY 600/t to TRY 12,900/t exw, while two other steelmakers raised their prices by TRY 150 and 200/t respectively during the same period.
Tosyali Holding's planned takeover of Turkiye's Bastug Metalurji faced a sudden reversal over the weekend. Initially agreeing to acquire shares and assets, both parties abruptly halted the process shortly thereafter. Tosyali Holding announced the termination of the acquisition by mutual agreement, stating they now have no association with Bastug Metalurji Sanayi and Bastug Celik Sanayi. Details on the reasons behind the withdrawal remain undisclosed.
Bastug Metalurji, located in Iskenderun, operates an electric arc furnace capable of producing 2 mnt of liquid steel annually, along with continuous casting machines and facilities producing 1.5 mnt of rolled products per year. The company supplies rebar ranging from 8 to 63 mm and billets sized between 130 mm and 200 mm to both domestic and international customers.
Outlook: The Turkish government recently announced a 35-38% increase in household electricity prices and a 30% rise for industrial usage. This change is expected to impact Turkish steel producers, already facing resilient scrap prices and sluggish demand. The pressure on producers is likely to persist unless prices in the US and EU recover.
