Prices up as Trump wades in

CFR Türkiye ferrous scrap prices recover because of a strong US market and US tariffs on steel imports, although the latter brings uncertainty over supply chains.

The proposed steel tariffs on steel imports proposed by the new Trump administration in the United States have had an early impact on ferrous scrap prices. The cost of Turkish imports recovered in February from yearly lows, largely driven by the implications of US steel tariffs which supported domestic US scrap prices and helped keep export offers from the region firm.

The tariffs had been announced on 10 February when the White House restored Section 232 tariffs on US imports of steel and aluminium from all countries to a level of 25% from 4 March. A week later, the US-based Recycled Materials Association (ReMA) said the full content of the presidential proclamations made clear that recycled steel (HTS 7204) was excluded.

BENCHMARK GROWTH

Platts, part of Commodity Insights, assessed the benchmark Turkish bulk import premium heavy melting scrap 1/2 (80:20) price at US$ 362.50 per tonne CFR on 25 February, recovering from a yearly low of US$ 332.50 on 17 January.

Meanwhile, US ferrous scrap prices in February were up by the largest amount in more than a year, as climbing finished steel prices, following tariffs on all steel imports, provided strong support.

Platts assessed No. 1 busheling at US$ 450 per light ton on a delivered basis in both the Midwest and Southeast on 26 February, an increase of US$ 40 since the start of that month and the highest settlement level since February 2024. The US$ 40 month-on-month increase for February was also the sharpest upward increment since December 2023.

US shredded scrap prices were assessed at US$ 435 per light ton on a delivered basis in both the Midwest and Southeast on 25 February, a rise of US$ 45 in the Midwest and US$ 40 in the Southeast since the start of the month.

US EXPORT DEMAND

The view that the US ferrous scrap market remained bullish in February with strong expectations of price increases was backed by FastMarkets. ‘This marks a continuation of January’s upward trend, as scrap prices are forecast to rise 3.2% month-over-month,’ it reported in mid-February. ‘The key driver remains lower supply, with inventory levels at 49.0, indicating tight availability relative to demand.’

The outlook suggested export demand remained a key factor although domestic consumption was the primary force behind price support. ‘With market consensus aligning around tightening supply as the primary factor, price stability remains uncertain. However, upward momentum appears set to continue.’

COSTLIER COLLECTION

Platts added that, considering the strength in their domestic markets, US recyclers maintained firm export offers to Türkiye in February. Recyclers in other regions followed suit and also faced climbing HMS collection costs in their respective regions.

HMS collection costs in the Benelux region were recently reported at EUR 300-305 per tonne delivered to the docks, climbing from EUR 290-295 delivered to the docks at the beginning of February.

Sources have described the recent recovery in scrap prices as supply driven. Amid the supply-side tailwinds in the market, the Turkish mills continued to face slow sales for Turkish rebar in both their export and domestic markets throughout February, with cold weather in Türkiye hindering construction season and the upcoming Ramadan period also limiting domestic demand.

PRODUCER CONCERN

For European steel producers, Eurofer president Henrik Adam called the Trump’s 25% blanket tariff on US steel imports ‘a radical escalation of the trade war launched under his first administration. It will further worsen the situation of the European steel industry, exacerbating an already dire market environment.’

Eurofer calculates the EU could lose up to 3.7 million tonnes of steel exports to the US, the second biggest export market for EU steel producers, representing 16% of the total EU steel exports in 2024. Losing a significant part of these exports cannot be compensated by EU exports to other markets, it says.

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