Market
October 24, 2022
Turkish scrap prices inch up slightly while bearishness remains
Turkish scrap market has turned quiet again after some purchases in mid-October. We heard three fresh deals completed in , which slightly lifted our assessment to $372 /t CFR (+$4 /t w/w, +$28 /t m/m).
| Scrap prices(1) $/t | 23-Sep | 30-Sep | 07-Oct | 14-Oct | 21-Oct |
| HMS 1/2 80:20 CFR Turkey | 344 | 365 | 368 | 368 | 372 |
| Shredded CFR Turkey | 364 | 385 | 388 | 388 | 392 |
| Notes: (1) weighted average of known transactions from all points of origin. | |||||
Persistent bearishness in the finished steel market has kept Turkish mills only buying scrap on a hand-to-mouth basis. Turkish long export prices fell by $20–40 /t w/w as a lack of demand continues to drive poor sentiment and force mills to reduce their offers. Mills have been seeking discounts on scrap prices, while scrap sellers held offers at the current level.
In the Asian scrap markets, however, offers for H2 increased to $400 /t CFR Vietnam, up by $15 /t w/w. The key driver of this increase is higher demand from India and Bangladesh, while demand in Vietnam stays weak. Bids in Vietnam are being reported at ~$380 /t.
Outlook: Turkish scrap prices will be dictated by steel demand recovery
Turkish finished steel sales and prices are on a decline. Consequently, mills have adopted a wait-and-see attitude towards replenishing their scrap inventory. With high production costs, mills will consider curtailing output if there are no signs of a recovery in demand. This will limit scrap demand and any meaningful increase in its prices. Our base case remains that scrap prices will soften in November, before tighter supply brings support to prices in the winter.
