Posted on 30 Mar 2023
Turkish mills are seen mostly maintaining their domestic scrap buying prices while imported scrap values continue to decline, Kallanish notes.
However, although domestic scrap buying prices remain stable on a TRY basis, they are falling on a USD basis due to the continuing depreciation of the lira.
A western mill that was inquiring about scrap on Tuesday bought one deep-sea and one short-sea scrap cargo. The Denmark-origin deep-sea scrap cargo, which was offered at $445/tonne cfr Turkey, was concluded at $439-440/t cfr for HMS 1&2 80:20, while short-sea scrap was bought at $410/t cfr.
Both short-sea and deep-sea prices have declined further on these bookings as the previous deals for premium HMS 1&2 80:20 and short-sea were done at $441-444/t and $425/t cfr respectively last week.
The scrap buying appetite of other mills is yet to return, meanwhile, as rebar sales have not yet recovered. Nevertheless, Turkish mills have been provided with cost relief as electricity and natural gas tariffs have been reduced by 15% and 20% respectively effective April, while scrap prices are continuing to fall.
While some market participants think Turkish mills can now afford higher prices for scrap, others say mills will decrease rebar prices to attract buyers. Rebar sales are not doing well and Turkey needs to regain its competitiveness in the global arena.
"The decrease in energy costs is not a surprise. Mills knew about it and have been positioning themselves accordingly for a while. A decrease in rebar prices would not be possible otherwise," says a trader.
A mill agrees, adding: “The recent decline in rebar prices has been steeper compared to scrap prices. This should not however mean that we are ready to pay higher for scrap. These declines in energy prices only compensate for our losses to some extent, that's all.”
Demand in Turkey's domestic rebar market remained weak on Wednesday as buyers are expecting lower prices. Although mills' offers stood at $715-740/t ex-works, offers at as low as $707/t were also available from those stockists that neeArcelorMittal empties fire-hit Gijón furnace, begins damage assessmentd to generate cash.
Turkish shipbreaking scrap prices were at $450-452/t delivered on Wednesday. The lira was meanwhile at 19.13 per dollar at business close on Wednesday.
Source:Kallanish
