Turkish scrap market becomes more active after price rebound

Turkish scrap import prices increased w/w

Turkish scrap slightly edged higher to $395 /t CFR for HMS 1/2 80:20 (+$3 /t w/w, -$11 /t m/m). Market activity has picked up after the initial price increase, and we heard five deals ranging from $387 /t to $402 /t CFR Turkey for HMS 80:20.

Scrap prices⁽¹⁾ $/t	22-Jul	29-Jul	05-Aug	12-Aug	19-Aug
HMS 1/2 80:20 CFR Turkey	406	365	352	392	395
Shredded CFR Turkey	426	385	372	412	415
Notes: (1) weighted average of known transactions from all points of origin.

Demand for Turkish longs products has remained poor and export prices have stayed unchanged. However, mills anticipate a recovery in demand in September and are thus procuring scrap to keep their facilities active rather than idle the furnaces. As a result, scrap suppliers appear to be content with the current CFR Turkey import prices, and Turkish mills have accelerated their number of shipments over this past week.

Similarly in the Asian market, scrap offers have remained high at $380 /t CFR Vietnam for H2, up from a range of $370–380 /t CFR Vietnam in the prior week. In addition, containerised scrap prices in Taiwan, China have also rebound. Buying interest in Southeast Asia has been slow, while there has been some buying of large volumes from India.

Outlook: Turkish scrap prices may temporarily hold at the current level

The market will anticipate a relative bounce in price this September following more restocking activity. However, many contacts expect this to be short-lived, as the weak demand sentiment is unlikely to support higher prices for long. Another downside risk comes from higher electricity costs, which may lead steelmakers to idle their assets if their margins continue to be compressed, therefore putting further downside risks on scrap demand.