Turkish scrap market turns quiet after a wave of restocking

Turkish scrap import prices increase w/w

Last week, the Turkish scrap market turned quiet again following active buying activity in the prior week. Consequently, our assessment for HMS 1/2 80:20 remained unchanged w/w at $381 /t CFR (+$42 /t m/m) due to a lack of new deals.

The previous price rebound in Turkish scrap market was mainly due to tight supply at a time when some buyers needed to restock. However, actual demand has stayed subdued, and buyers stopped buying once they replenished their stocks.

Turkish finished steel export prices have also found some support since the start of December from the positivity brought on by easing Covid-19 control measures in China. Real demand, however, remains weak and market participants have indicated Turkey is uncompetitive as local European prices continue to fall and the Asian market is still out of reach.

Asian scrap offers rose further to $420 /t CFR Vietnam for HMS 80:20, up by $10 /t w/w. However, there has been no booking at this offer level and market has started to soften this week.

Outlook: Turkish scrap demand may see some recovery in 2023 Q1

Until the end of 2022, the scrap market will remain silent given bid-offer mismatch between buyers and sellers, as well as due to the holiday season. Mills anticipate increased demand for raw materials and expect consumption trends to move upwards in 2023 Q1 – particularly when China announce stimulus packages for their industry and with easing Eurozone inflation– yet the risk of falling or stabilising prices remains given the reluctance from buyers to purchase material. Mills are likely to curtail output or stop operations if margins were to remain negative in the new year.