Posted on 29 Mar 2023
Turkish mills’ appetite for scrap purchases remains weak amid subdued steel sales and falling prices. Although a Marmara mill returned to the market and concluded purchases of two US-origin cargoes at the end of last week, other mills remain out of the market.
The US cargoes concluded at $444/tonne for HMS 1&2 80:20 and $446/t cfr Turkey for HMS 1&2 85:15 (see Kallanish passim).
Although most market participants were expecting to see stronger demand this week, this is yet to materialise. Despite their obvious requirement for scrap purchases, most Turkish mills initially want to see a recovery in steel sales before buying scrap. However, rebar demand is yet to recover and prices are continuing to decrease amid Ramadan, upcoming elections and uncertainty about the reconstruction of earthquake-hit cities.
A scrap supplier tells Kallanish: “I am expecting them to return to the market soon. They need to buy raw material and they are running out of time to complete it [purchases].”
“They are not even giving bids today. But I’m afraid the longer they halt purchases, the steeper the price jumps they will face on their return. Our current dock costs and higher freight do not let us accept lower prices today,” says a European supplier.
Following the US sales, although most mills expect to see even lower prices this week, suppliers say there is not much room for further falls. On the contrary, they expect prices to recover once Turkey returns to the market.
“I think prices will climb back to their previous levels, at around $460/t cfr for US-origin HMS 1&2 80:20, once Turkish mills resume scrap purchases,” says a supplier.
On Tuesday, a Turkish mill inquiring about short-sea scrap was heard giving a bid at $410/t cfr, while suppliers resisted this level. Suppliers’ offers are mostly at above $420/t cfr Turkey.
While rebar export sales remain almost zero, domestic rebar demand is yet to recover. A western Turkish mill, which decreased its price to $725/t on Monday, lowered further on Tuesday and sold around 17,000 tonnes at $715/t ex-works. Other mills, offering higher prices of up to $740/t, received no demand, however. Some stockists that need to generate cash decreased their prices to as low as $705/t, meanwhile.
Source:Kallanish
