Ferrous prices firm amid squeezed margins

Sources suggest a market standoff between sellers who cannot lower their prices and buyers who cannot afford to pay more. Turkish mills have been resisting elevated scrap prices amid tight margins.

Turkish deepsea imported scrap prices strengthened throughout January before stabilising in the first half of February, with the continued seasonal supply crunch and tighter margins for mills leading to a stalemate between buyers and sellers.

Platts, part of S&P Global Energy, assessed Turkish imports of premium heavy melting scrap 1/2 (80:20) at US$ 370 CFR per tonne 2 January, rising US$ 377 by the end of the month and softening to US$ 375.50 by 16 February.

Scrap prices rose steadily throughout January, with supply from the US tightening further amid continued seasonal supply constraints. Repeated snowstorms impacting the US East Coast halted collection and fresh scrap generation.

Competition

The rising scrap prices prompted many US recyclers to focus on selling domestically rather than exporting to Türkiye, further tightening supply in the Türkiye import market. The US Midwest shredded scrap domestic scrap settlement was at US$ 450 per light tonne in February, up from US$ 420 in January and US$390 in December.

‘The market consensus generally considered that more demand and less supply would be the sure case for February,’ one recycler source said. ‘Therefore, Turkish mills would have to enter a head-to-head competition with US domestic mills that would be brutal as … the US domestic market is gathering momentum.’

Meanwhile, bullish dry Atlantic bulk freight rates continued to squeeze margins for sellers and support higher scrap prices. Platts assessed dry bulk Supramax freight rate from New Jersey to Türkiye at US$ 31.25 per tonne in mid-February, up from US$ 26.50 on 2 January.

EU sellers hesitant

Offers from EU sellers also remained scarce at the end of January and early February, with harsh winter weather conditions in Europe also stalling collection rates. Additionally, the euro strengthening against the dollar throughout 2026 squeezed margins for EU sellers, also leading to fewer offers from European suppliers in January and February 2026 compared with Q4 of 2025.

The EUR/US$ spot rate started the year at US$ 1.1745 and reached a high of US$ 1.1972 on the 27^th before softening to US$ 1.1853 on 16 February.

Firm collection costs also supported rising scrap prices, with recycler sources reporting that collection costs were at approximately EUR 270-275 by mid-February, compared with EUR 265 at the end of December.

With a bullish exchange rate and higher collection costs, several supplier sources reported that breakeven levels for European sellers were in the low US$ 370s per tonne CFR in January and February.

Weak rebar demand

Deal activity was very subdued in late January and early February, participants reported, with Turkish mills hesitant to purchase for March shipment due to limited rebar sales in 2026.

Tight margins for Turkish mills amid weak domestic and export demand for rebar weighed on market activity during the period. The outright spread between imported scrap and exported rebar was at US$ 177 per tonne in mid-February, down from US$ 190 at the beginning of January.

Both are below the frequently reported breakeven level for mills of US$ 180-200. Turkish mills were reportedly resisting elevated scrap prices.

‘No matter the slow material flow or winter conditions… the margin between rebar and scrap is way too narrow,’ a mill source said. ‘It is not making any sense to buy and produce from scrap. Mills will probably drop the utilisation rate.’

Multiple participants expected prices to remain rangebound towards the end of February, amid a stalemate between buyers and sellers. ‘There’s a standoff between sellers who can’t lower their price and buyers who cannot afford to pay more,’ the second recycler source said.

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