Turkish scrap demand stays subdued

Turkish scrap import prices slightly increased w/w

Turkish scrap market turned quiet again and prices for imported material have remained largely stable. Our assessment slightly rose by $2 /t w/w to $350 /t CFR for HMS 1/2 80:20 on one confirmed deal from a US seller, while prices were $18 /t lower m/m.

Scrap prices⁽¹⁾ $/t	14-Oct	21-Oct	28-Oct	04-Nov	11-Nov
HMS 1/2 80:20 CFR Turkey	368	372	372	348	350
Shredded CFR Turkey	388	392	392	368	370
Notes: (1) weighted average of known transactions from all points of origin.

Turkish long products continued their downtrend into November with demand remaining weak. Export prices for rebar and wire rod fell by $20–35 /t w/w and $70–90 /t m/m. Although spot electricity prices have come down sharply, Turkey’s steelmaking costs have remained relatively high, as reported by a market contact. With slow steel demand and high steelmaking costs, scrap demand has stayed subdued.

In the Asian scrap markets, offers for H2 have dropped to $380 /t CFR Vietnam, down by $20 /t w/w. However, no deal has been heard at this level as steel production remains low due to the poor demand situation.

Outlook: Turkish scrap prices to remain under pressure

The demand outlook for Turkish longs products is gloomy, especially with bearish sentiment in many of the major export destinations. Moreover, the recent sharp fall in Far East longs prices has further hurt the competitiveness of Turkish longs exports. This will continue to put downward pressure on scrap demand and prices.

On the other hand, Turkish scrap prices are unlikely to see a sharp decline. When falling electricity prices feed into steelmaking costs, mills will face less pressure in pushing for sharp reduction in scrap costs. Also, seasonally lower scrap supply in winter will provide some support to prices going forward.