Turkish scrap prices rebound w/w, though demand stays limited

Turkish scrap import prices increased w/w

Turkish scrap prices rebounded on a fresh deal last week, for the first time since the beginning of September. Our assessment for HMS 1/2 80:20 rose to $365 /t CFR, up by $21 /t w/w and down by $31 /t m/m.

Scrap prices⁽¹⁾ $/t	02-Sep	09-Sep	16-Sep	23-Sep	30-Sep
HMS 1/2 80:20 CFR Turkey	396	371	349	344	365
Shredded CFR Turkey	416	391	369	364	385
Notes: (1) weighted average of known transactions from all points of origin.

The main reason for the price increase is still unclear, as reported by market contacts. There may be two possible reasons. Firstly, some restocking demand for scrap may have come through, as stock levels gradually run low despite production cutbacks. Nevertheless, buying interest for Turkish longs products in the export market stays weak, as mills’ offers are perceived to be too high. Secondly, some regional sellers may have lifted scrap offers given constrained supply.

Asian scrap markets were quiet last week, with price offers staying unchanged at $405 /t CFR Vietnam. Finished steel demand continued to be slow in the Far East market.

Outlook: Limited upside for Turkish scrap prices

Scrap prices may pick up because of restocking demand. However, potential upside is limited, unless there is a meaningful recovery in finished steel demand. Finished steel suppliers have raised their longs prices beyond current workable price levels due to high scrap and energy costs, which may discourage buying, thereby impacting demand for both finished longs and scrap.