Turkiye: Cautious mill demand drags deep-sea scrap prices back to pre-Iran war levels

• Unsupportive steel margins drive selective inquiries
  
  
• Turkish mills lower domestic scrap purchase prices by up to $4/t
  
  

Turkish deep-sea imported ferrous scrap prices remained under pressure during the week ended 2 July, as weak finished steel demand, limited booking activity, and cautious mill procurement continued to weigh on market sentiment. Buyers largely stayed away from the deep-sea market, preferring short-sea cargoes and delaying purchases amid poor downstream demand and squeezed steelmaking margins.

Tradable values for US-origin HMS 80:20 were heard at $375-382/t CFR, clustering around $378-382/t CFR, while European-origin HMS 80:20 was indicated at $372-373/t CFR. Fresh US-origin offers remained around $385-386/t CFR, whereas Turkish mills continued bidding near $365/t CFR for European-origin material, showing the persistent gap between buyer expectations and supplier offers.

Price assessments

• US-origin HMS80:20 around $380/t CFR Turkiye, down by $3/t w-o-w.
  
  
• US East Coast HMS80:20around $345/t FOB, down $8/t w-o-w.
  
  

Trading activity remained thin during the week, with only four-five deep-sea transactions reported. Confirmed bookings included Finland-origin HMS 80:20 sold to a West Marmara-based mill at $372/t CFR, UK-origin HMS 80:20 sold to another West Marmara mill at $369/t CFR, Russian-origin HMS 80:20 sold to an Aegean-based mill at $377/t CFR, and a reported US-origin HMS 80:20 cargo sold to a Mediterranean-based mill at $375/t CFR.

However, several market participants questioned the reported US-origin transaction, noting that $375/t CFR was unusually low for a US cargo. Some sources suggested the cargo was actually 95:5 grade, priced around $405/t CFR, while others said both the buyer and seller denied the reported sale.

Market participants also noted that Turkish HRC exporters face additional challenges after a significant reduction in the EU import quota from 1 July, limiting export opportunities and increasing pressure on mills to seek alternative markets. The weaker steel export outlook is expected to weigh further on raw material procurement.

Market comments

Buying sentiment remained subdued as Turkish mills continued hand-to-mouth scrap procurement. Market participants noted that while the recent correction in imported scrap prices appears to be nearing its end, mills are unlikely to return aggressively to the market until finished steel demand and export sales show a more meaningful recovery.

A Baltic market participant told BigMint, "Mills are really not in a rush to buy. Weak downstream steel demand has kept procurement hand-to-mouth, with little urgency to secure additional scrap cargoes."

A US-based trader added, "Demand for Turkish steel exports remains weak, and unless mills find alternative export markets following the reduction in EU safeguard quotas, imported scrap prices are likely to come under further pressure."

Local scrap prices cut further

Several Turkish mills reduced domestic scrap purchase prices by TRY 200-300/t (around $2-4/t) during the week to align local procurement costs with softer imported scrap prices. Market participants said the cuts reflected mills' efforts to protect margins as weak finished steel demand continued to pressure profitability.

Demand for long steel products remained subdued in both domestic and export markets. Sluggish construction activity and seasonal summer slowdowns kept local rebar demand weak, while export rebar offers remained largely unchanged at around $580/t FOB.

At the same time, falling imported scrap prices widened the scrap-to-rebar spread to $195-200/t, improving steelmaking margins. However, the benefit has yet to translate into stronger scrap buying, as mills continue prioritising finished steel sales and limiting scrap purchases to immediate production requirements amid weak order books.

Outlook

Turkish imported scrap prices are expected to remain under pressure in the coming week as mills continue to procure only on a need-based basis amid weak domestic and export demand for finished steel. While the recent correction has brought prices closer to workable levels, a meaningful recovery is unlikely unless rebar sales and export orders improve. Market participants expect deep-sea scrap prices to find support around the $375-380/t CFR range, with firm US domestic scrap prices and elevated freight costs likely to limit further downside. However, cautious mill buying and ample cargo availability are expected to keep the market subdued in the absence of stronger finished steel demand.