Turkiye: Imported ferrous scrap prices remain largely stable w-o-w; buyers remain cautious amid weak rebar sales

Imported ferrous scrap prices in Turkiye remain stable w-o-w after a busier last week. The imported scrap market was quiet in the middle of the week due to a public holiday, with a generally pessimistic outlook prevailing. There were minimal fresh deep-sea scrap deals heard throughout this week as Turkish steel producers were out of the market and thin activity in scrap was seen because rebar sales remained limited.

As per BigMint's bulk vessel tracker, around 22-24 deep-sea bulk vessels have been booked so far this month for late-April and early-May shipments.

As per market sources, dockside scrap costs in the Benelux region are at Euro 318-320/t which could push up Turkish import prices closer to $384-385/t CFR. However, weak scrap flows and rising collection costs could make $378-380/t CFR unattainable, with prices likely to remain firm if Turkish mills increase demand.

BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $385/t CFR, a slight decline of 1/t w-o-w.

BigMint's assessment for bulk HMS (80:20) from the US East Coast stood at $359/t FOB, down $2/t w-o-w.

As per a mill source, scrap prices should drop to below $350-355/t CFR to remain competitive amid the threat of Chinese steel exports. High scrap costs could lead to Turkish EAF producers losing market share to Chinese competitors.

A few market sources mentioned that sellers seem satisfied with around $382-385/t CFR, especially since mills have met their immediate needs and are likely to stay put during the upcoming Chinese holiday period.

As per Baltic region suppliers, the market seems stable, while UK traders have different expectations as most of the suppliers are thinking they can get higher prices, but mills are hoping for lower ones as mills might delay buying June shipments to test the market.

Turkish exported rebar stood at $588-590/t FOB. The scrap-to-rebar spread was assessed at $205/t FOB, which increased from $203/t last week.

Recent deals:

• A US-origin bulk scrap cargo comprising HMS(80:20) sold at $385.t/t to an East Marmara-based mill on a CFR Turkiye basis.
  
  
• A European bulk scrap cargo sold to a Turkish mill at $383/t on a CFR Turkiye basis.
  
  
• A US origin bulk scrap cargo was booked at $384/t to an Aegean region-based mill on a CFR Turkiye basis.
  
  

Steel market: Domestic rebar offers ranged from $590?610/t exw, depending on the region, with major Marmara-based steel producer ICDAS holding steady at $620/t exw Biga and $631/t CFR Marmara. Price stability was attributed to weak sales and high costs, with mills unable to reduce quotes due to rising scrap costs. Export rebar prices were also steady at around $590/t FOB for May shipments, though sales to foreign clients were limited due to uncompetitive prices. Some mills were open to cooperation at a slightly higher level of $585/t FOB, but no firm sales were reported.

Turkish long steel producer Kardemir posted a higher net profit in 2023 despite operational profit and revenue lagging behind compared to last year. Revenues were steady, but the devaluation of the national currency by almost 44% led to a 33.6% drop in dollar terms to $3.27 billion. Operational profit switched to a loss of $127.7 million, but the company remained in the black, partly due to deferred taxes and other financial earnings.

Production and sales costs in 2023 were generally stable, with only a 1.1% drop in the Turkish lira to TRY 49.4 billion. However, the dollar-denominated costs fell by 31.1% to $2.1 billion. Kardemir increased sales, with semi-finished shipments rising to 854,532 t from 627,719 t and finished steel supplies reaching 1.5 mnt, up from 1.4 mnt. Utilisation rates at steelmaking facilities increased to 70.6%, compared to 65.6% last year.

Outlook: Market sources expect Turkish mills to remain in a wait-and-watch mode; however, mills are consuming more scrap due to increased capacities, which might reduce their bargaining power in the long run.