Turkiye: Imported ferrous scrap prices up $4/t w-o-w; mills continue bookings for May shipments

Imported ferrous scrap prices in Turkiye rose by $4/tonne (t) w-o-w after multiple bulk deals were seen throughout this week. Some Turkish mills continued seeking May cargoes, despite low rebar sales, particularly for exports.

As per BigMint's bulk vessel tracker, Around 18-20 deep-sea bulk vessels have been booked so far during the current month for late April and early-May shipments.

As per market insiders, short-sea supply was tighter compared to deep-sea. Offers for Black Sea-origin short-sea scrap were at around $375/t CFR Turkiye due to limited availability. However, mills weren't interested in prices above $360/t CFR, indicating a significant market disparity. Recent short-sea deals had closed at around $370/t CFR.

BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $387/t CFR, an increase of $4/t w-o-w.

BigMint's assessment for bulk HMS (80:20) from the US East Coast stood at $361/t FOB, slightly up by $1/t w-o-w.

Turkish exported rebar stood at $590/t FOB. The scrap-to-rebar spread was assessed at $203/t FOB, which narrowed from $213/t last week.

Recent deals:

• A Sweden-origin cargo included HMS (80:20) sold to a West Marmara region-based mill at $385.5/t CFR.
  
  
• A Baltic supplier sold HMS (80:20) to a west Black Sea steel mill at $380/t CFR.
  
  
• A UK supplier sold 40,000 t of HMS (80:20) & shredded scrap at $389/t CFR.
  
  
• A US-origin bulk scrap cargo to Turkiye included HMS (90:10), shredded, and bonus scrap at $389/t and $406/t CFR.
  
  
• An unconfirmed UK-origin deal included HMS (80:20) at $383/t and bonus scrap at $403/t CFR.
  
  
• North Europe to West Marmara mill: HMS(80:20) at $381/t.
  
  
• US to Mediterranean region mill: HMS(80:20) at $387/t.
  
  
• Netherlands to West Black Sea region mill: HMS(80:20) at $381/t.
  
  
• UK to East Marmara and Aegean mill: HMS(80:20) concluded at $380/t.
  
  
• US to Mediterranean region mill: HMS(95:5) and bonus scrap at $394/t and $404/t.
  
  
• US to West Marmara region mill: HMS(80:20) concluded at $382/t CFR.
  
  

Domestic scrap: Turkish domestic scrap prices have weakened since late March due to ongoing currency depreciation and slow demand. This decline comes as steel mills maintain their lira-denominated domestic scrap purchase prices amid a weak finished product market. Turkish mills consume around 28-30 mnt of steel scrap yearly with a quarter of the volume typically sourced domestically.

Steel market: The Turkish billet market shows signs of activity, but demand remains low. Billet prices are now estimated at $560?570/t exw, down from $580/t exw before the Ramadan and Eid holidays. Market insiders believe a fair price is $560?565/t exw, with buyers likely pushing for $550/t exw. Russian billets for May shipment were offered at $540?545/t CFR, similar to earlier rates. Malaysian-origin billets received strong interest from Turkish buyers, with a reported sale at $520-525/t CFR for the May shipment.

Turkiye's longs steel market has struggled to recover after the Ramadan holidays, with rebar prices under pressure. Domestic rebar offers from Turkish steelmakers have dropped by $5/t since the start of the month, now ranging at $590?620/t exw, depending on the region. This decline is driven by low local demand and weak construction activity.

Export prices of rebar from Turkiye have also fallen to $590/t FOB for May shipments, down from $590?600/t FOB two weeks ago. Foreign demand remains limited. Turkish wire rods are being offered at around $600/t FOB for May shipment.

Consumer index: Turkiye's consumer confidence index in April increased by 1.4% compared to March 2024, reaching 80.5 points, but it dropped by 8.1% y-o-y, according to the Turkish Statistical Institute (TUIK). This indicates a negative outlook, with consumers hesitant to make major purchases, affecting steel-consuming sectors.

The construction and automotive industries showed mixed trends. House sales in March were 105,394 units, slightly down by 0.1% y-o-y. Auto sales rose by 4.2% to 114,210 units, but auto production dropped by 4.3% to 136,611 units.

The primary reasons for low consumer confidence are currency fluctuations and economic challenges. The lira depreciated by 2.5% in March, closing at $1 = TRY 32.38, while inflation reached 68.5%, up by 3.16 percentage points m-o-m.

Auto sector: Turkiye's automotive sector saw positive output in Q1 2024 despite a dip in March. Overall production increased by 2.9% y-o-y to 377,070 units, with passenger cars driving the growth. Local sales rose by 24%, reaching 307,461 units. Foreign cars remain in high demand, with imports up by 41% to 204,558 units. In March, production fell by 4.3% to 136,611 units, and passenger car output decreased by 0.4% to 87,260 units. Local sales rose, but exports dropped 3.9%.

Outlook: Market insiders expect Turkish mills to continue restocking for May and early June shipments, with more frequent deal activity anticipated in the near term. A significant portion of monthly bookings are still pending, suggesting that mills will remain active in the market in the coming weeks.