Turkish scrap CFR stabilises

Lower rebar demand in Turkey and global uncertainty combine to dampen prices.

Prices for Turkish imports of ferrous scrap have remained largely stable in recent weeks. This is down to slower rebar sales in Turkey, reduced Chinese billet offers and geopolitical uncertainty. The issues combined to prevent any upside in prices despite firm collection costs faced by the European sell side.

Platts, part of S&P Global Commodity Insights, assessed Turkish bulk imports of premium heavy melting scrap 1/2 (80:20) at US$ 384 per tonne CFR on 12 April, with prices between US$ 378 and US$ 390.50 per tonne during the previous month.

Sell side sentiment remained largely firm in their offer levels, with the key resistance area for premium HMS 1/2 (80:20) around US$ 385 per tonne since early April.

COLLECTION FACTOR

European recyclers cited collection costs of EUR 315 per tonne delivered to the docks as of 15 April in both the Benelux and Baltic regions, while US recyclers saw sideways domestic HMS settlements in April, allowing exporters in the region to hold export offers largely firm.

Despite firm sell side sentiment, Turkish mills resisted increases in scrap import prices, pointing to falling billet offers from China, which were reported at as low as US$ 510 – 515 per tonne CFR Turkey. Slow Turkish rebar sales in the export market also helped to prevent a rally in scrap prices, with the material available at more competitive prices in alternative regions like Algeria and Egypt.

Domestic deal activity was also limited ahead of Turkey’s local election period as mills, stockists and traders preferred to ‘watch-and-wait’ for the outcome on 31 March. Although President Recep Tayyip Erdoğan’s AKP party suffered defeats in major cities, sources mostly said this would end up having negligible near-term consequences for the steel market.

ISRAEL BAN

Sentiment in the Turkish rebar market was also adversely affected by the announcement of steel export restrictions to Israel announced in the middle of the Eid holiday, which was already limiting deal activity.

Turkey’s Trade Ministry restricted 54 product groups to Israel, including steel and aluminium, saying this would remain in effect until a permanent ceasefire was declared in Gaza as well as an uninterrupted flow of humanitarian aid into the territory.

Israel was Turkey’s largest rebar export market in February, with volumes to Israel up 53% to 31 307 tonnes, while sales to Yemen were down 58% on the month to 31 183 tonnes, according to data from the Turkish Statistical Institute. Turkish mill sources have also recently reported that sales to Yemen have become difficult in recent weeks due to geopolitical tensions.

With a lack of alternative export opportunities, the impact of losing two major rebar export markets may lead to reduced buyer interest in imports of ferrous scrap in the near-term, and an increased dependence on the domestic market for finished steel sales, sources said.

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