Turkiye: Imported scrap prices soften w-o-w; weak rebar demand squeezes mill margins

• Sellers keep scrap offers firm despite weak rebar demand
  
  
• Kardemir's billet sales support semi-finished sentiment
  
  

Turkish deep-sea imported scrap prices softened slightly in the week ended 13 May, with HMS 80:20 assessed around $413-415/t CFR amid cautious mill buying and limited trading activity. Weak downstream rebar demand and squeezed steelmaking margins continued to pressure buyers, although elevated freight costs, firm collection prices, and limited cargo availability supported seller offers.

Price assessments

• US-origin bulk HMS 80:20: $413/t CFR Turkiye, down by $1/t w-o-w
  
  
• US East CoastHMS 80:20: $379/t FOB, stable w-o-w
  
  

Around four deep-sea scrap deals were heard during the week, although Turkish mills remained cautious amid weak steel demand and squeezed margins.

In the mid-week, a Mediterranean region-based mill booked a US-origin cargo comprising 16,000 t of HMS 90:10 at $418/t CFR and 13,000 t of shredded/bonus grades at $433/t CFR, equivalent to around $412-413/t CFR for HMS 80:20.

Despite the deals, most suppliers continued targeting above $420/t CFR for premium US- and Northern EU-origin cargoes, while buyer resistance remained strong as the scrap-to-rebar spread narrowed to around $177-178/t, below the commonly referenced workable margin range of $190-200/t for Turkish EAF mills.

Turkish export rebar prices were largely heard around $590-592/t FOB during the week. Elevated freight costs, firm European collection prices, and limited scrap availability continued supporting exporter offers.

Since the beginning of the year, imported scrap prices have risen by nearly $40-45/t, while rebar prices increased by only around $25-30/t, continuing to pressure mill margins. Market participants said most Turkish mills are currently operating cautiously and purchasing scrap only for immediate production needs.

Market comments

A market participant said, "Northern EU and US-origin premium cargoes can still achieve around $412-415/t CFR Turkiye, although mills remain reluctant to accept significantly higher levels because margins are already under pressure."

Another source noted, "Mills are increasingly searching for cheaper semis and alternative raw materials as weak rebar demand continues to squeeze profitability."

Market participants said Turkish mills remain squeezed between rising scrap, freight, and energy costs and still-fragile finished steel demand, as rebar price gains have lagged behind the increase in raw material costs. Most mills continued purchasing scrap on a hand-to-mouth basis, while some larger producers were heard carrying sufficient inventories and waiting for softer prices before returning to the market. Limited availability of US-origin cargoes also restricted fresh deep-sea trade activity.

One market participant commented: "The issue is not that rebar prices are weak -- mills have managed to raise finished steel prices slightly. But scrap has increased much faster, and mills are struggling to pass on the full cost increase."

Its noteworthy that during 2025, Turkish mills benefited from competitively priced billet imports from Russia, China, and Malaysia, which partially reduced dependence on expensive imported scrap. However, those advantages have narrowed significantly in recent months.

A trader said: "Earlier, mills still had alternatives. Cheap billet imports were helping balance raw material costs. But now Chinese billet offers are mostly around $535-550/t CFR Turkiye, while Russian billet is near $510-520/t CFR, so the gap versus scrap has tightened considerably."

At the same time, reduced HBI availability from the Middle East has further increased reliance on imported scrap procurement. Industry participants added that rising freight and energy costs following the Middle East conflict continue to support global scrap prices, as exporters and recyclers face elevated logistics and operating expenses.

Another Baltic origin supplier commented: "As long as freight costs remain elevated, exporters have little incentive to reduce scrap offers aggressively."

Domestic Semi-finished steel market: Turkish domestic billet sentiment improved during the week after integrated steelmaker Kardemir reopened billet sales at relatively lower prices and reportedly concluded nearly 100,000 t within some hours, indicating active restocking interest from local rerollers and long steel producers.

Kardemir offered 150 x 150 mm billet at around $530-540/t exw, down by $5-10/t compared with previous sales levels. Market participants noted that the lower-priced sales helped revive spot market activity, particularly as many buyers had delayed purchases earlier expecting a price correction.

Meanwhile, overall Turkiye's domestic finished steel market continued to remain under pressure amid weak construction demand, slow rebar sales, and squeezed mill margins, which continued to limit broader trading activity.

Local billet offers from other Turkish mills were largely heard around $540-550/t exw, while producers in the Iskenderun region targeted relatively higher levels near $555-560/t exw. However, following Kardemir's sales, market participants expected some mills to gradually soften offers to remain competitive.

Industry participants added that Kardemir's billet prices appeared comparatively attractive against imported billet offers from the CIS region at around $510-515/t CFR Turkiye and Chinese billet offers near $530-535/t CFR.

Limited availability of Iranian billet and persistently firm imported scrap prices also continued to provide underlying support to the domestic billet market.

Outlook

BigMint expects Turkish imported scrap prices to remain broadly firm in the upcoming days, supported by elevated freight costs, tight supply conditions, and the need for additional June-shipment bookings. However, weak rebar demand, squeezed mill margins, and cautious hand-to-mouth buying are likely to continue limiting aggressive price increases.

Market participants will closely monitor Turkish export rebar sales, fresh deep-sea bookings, and billet import competitiveness for clearer market direction although broader finished steel demand conditions continue to stay fragile.