Turkish scrap market activity slows

Turkish scrap import prices decreased marginally w/w

Last week, Turkish scrap prices fell by a marginal $2 /t w/w (up $28 /t m/m) to $393 /t CFR for HMS 1/2 80:20. Market activity calmed again after a series of purchases in mid-August.

Turkish mills have lowered their finished longs offers by 10–20 /t w/w due to persistent lack of demand in both export and domestic markets. The ongoing finished steel weakness led mills to push for reduction in current high scrap prices, though scrap prices stayed elevated due to supply disruptions.

On the other hand, scrap export offers to the Asian market rose to $420–430 /t CFR Vietnam for H2, up from $380 /t CFR Vietnam in the week before. However, bids were around $405 /t level and market participants expect prices to fall in the near term. Therefore, trade has been very limited.

Outlook: Limited finished steel sales may put downward pressure on Turkish scrap prices

Despite low buying appetite currently, Turkish longs producers are hopeful that September will signal an upturn in buying activity. However, if market conditions do not improve, market participants have indicated the rising production costs could force further operational cuts for steel mills after the holiday period. This will put downside pressure on scrap demand and prices.