The price of Turkish scrap imports recovered by early November but the country’s precarious economy, regional conflicts and other ‘bleak’ markets do not offer short-term optimism.
After trading in a narrow range of US$ 374-377 per tonne CFR throughout September, the benchmark Turkey premium HMS 1/2 (80:20) assessment for deep sea bulk imports of ferrous scrap gradually weakened over October to a low of US$ 350 per tonne CFR on 24 October before recovering to US$ 372.50 by early November.
The lack of price volatility throughout September, as reported by Platts, part of S&P Global Commodity Insights, came as Turkish mills and scrap recyclers reported relatively stable supply and demand fundamentals.
However, Turkish premium HMS 1/2 (80:20) import prices began to fall in early October as the war in the Gaza Strip generated uncertainty over how the conflict would affect Israeli demand for Turkish rebar, which accounted for 22% of Turkish rebar exports during the first nine months of the year – and Israeli exports of short sea scrap to Turkey.
According to Platts, another reason Turkish mills looked to pressure import scrap prices down was the 20% increase in their natural gas and electricity prices from 1 October, which market participants estimated would add around US$ 10-15 per tonne to finished steel production costs for EAF producers.
The market did see greater activity towards the end of October with mills restocking to cover their November and December production. Scrap prices recovered to US$ 363.50 per tonne CFR on 31 October and US$ 372.50 on 6 November with a flurry of bookings reported at that time.
However, the Platts outright Turkey import scrap-export rebar spread narrowed to a 32-month low of US$ 184 per tonne on 31 October as Turkish mills were squeezed between higher input costs and poor export rebar demand, with strong price competition from North Africa and Asia.