Turkish scrap prices edged higher on hand-to-mouth purchases

Turkish scrap import prices increased w/w

Last week, Turkish scrap prices were largely stable, slightly inching up on two new deals to $368 /t CFR (+$3 /t w/w, -$3 /t m/m).

Scrap prices⁽¹⁾ $/t	09-Sep	16-Sep	23-Sep	30-Sep	07-Oct
HMS 1/2 80:20 CFR Turkey	371	349	344	365	368
Shredded CFR Turkey	391	369	364	385	388
Notes: (1) weighted average of known transactions from all points of origin.

Turkish finished steel exports have slowly improved, with some buyers purchasing small quantities of longs products. This translated into need based purchases of scrap. On the other hand, scrap sellers are holding offers firm at the current level, citing limited availability.

In the Asian scrap markets, offers for H2 fell to $380 /t CFR Vietnam, down by $25 /t w/w. Bid level was even lower at $365 /t CFR Vietnam, which indicates worsening demand sentiment. Buying interest for finished steel products have declined towards the end of September and longs quotes have started to trend down.

Outlook: Turkish scrap prices face downward pressure

Energy prices in Turkey are likely to go up by 4.9% to 37% in October. Together with ongoing demand weakness for finished steel products, mills may push for lower scrap costs as restocking demand wanes. We expect longs demand to stay weak especially entering the winter months, limiting scrap demand going forward.