Ferrous scrap prices in Türkiye fell sharply in August after remarkable earlier stability amid growing concern about low-cost Chinese products flooding global markets.
Turkish imports ferrous scrap prices have declined sharply in recent weeks following months of stability, as attractive billet offers from the Far East, notably China, impacted buyer interest in scrap.
Platts, part of S&P Global Commodity Insights, assessed Turkish bulk imports of premium heavy melting scrap 1/2 (80:20) at US$ 363.50 per tonne CFR in late August, down from US$ 388 on 31 July with prices throughout July stable within the tight range of US$ 388-390 amid finely balanced market fundamentals.
In July, sellers’ rates remained largely firm, despite the clear preference for billet expressed by Turkish mills. They cited slow inflows and firm collection costs as reasons for not reducing offers to Turkish mills.
PRICES SLIDE
In July, recyclers faced HMS collection costs as high as EUR 320-330 per tonne delivered to the docks in the Benelux region. They hoped the reported large volumes of billet bookings from the Far East in June and July would not impact August shipment scrap requirements in Türkiye, owing to the long lead times attached to material booked at the time, which the market expected would be for September or October shipment.
In August, however, Turkish import scrap prices slid from US$ 386 per tonne CFR on 1 August to bottom at US$ 360 on the 21st as buyside pressure on the sellers intensified, scrap flows improved and collection costs faced by recyclers finally began to ease.
In August, scrap sellers found themselves offering material again into a market the Turkish mills had largely stepped back from. They had yards full of material collected at higher average costs and held on it for a market recovery while prices slid.
CHINA SLUMP
Long steel products flooding the global market at markedly cheaper rates is being attributed to the slump in the Chinese economy. According to Fastmarkets, another reason is that steel makers in China must adopt revised standards for rebar by 25 September.
‘Sellers need to clear their existing stocks of rebar… because rebar produced to the 2018 standard will not comply with the regulations for sales after that date,’ the agency reports. ‘Chinese domestic rebar prices dropped to a seven-year low on 25 July. This led to bearish sentiment in the steel market, with the prices for hot-rolled coil and semi-finished steel following the dive downward.’
In the first six months of 2024, China’s exports of hot rolled coil and steel sheet was 13.70 million tonnes, up by nearly 58% from the corresponding period of 2023, Fastmarkets has calculated based on Chinese customs data. China also exported 1.09 million tonnes of hot-rolled bar and rebar in the same period, up 11% year-on-year.
ArcelorMittal has also expressed concerns about overcapacity in the global steel market. Reporting lower profits in Q2, it says net earnings of more than US$ 500 million were 46% down on the previous quarter. In the outlook section, the company calls current market conditions ‘unsustainable’.
‘China’s excess production relative to demand is resulting in very low domestic steel spreads and aggressive exports,’ it adds. ‘Steel prices in both Europe and the United States are below the marginal cost.’
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