At the SteelOrbis Italy Forum 2024 held in Milan on October 8, Ayça Özbay, regional ferrous scrap market specialist from SteelOrbis, spoke about the current situation in the Turkish scrap market. She reminded the participants that, along with most steel markets in the world, the Turkish steel industry has been facing high inflation rates, tight monetary policies, lack of steel demand, low prices and profit margins which have resulted in low capacity utilization rates. She went on to say that margins had especially narrowed to very drastic levels as of May this year, though they recovered in September, more than doubling to $15-20/mt. This positive trend is expected to continue in October as well.
Explaining how the margin situation evolved between May and September, the SteelOrbis representative pointed out that Turkish mills were hesitating to buy scrap in June and July amid weak steel demand, price uncertainties and the high volume of billet imports. However, in August deep sea scrap prices declined and Turkish mills decided to replenish their stocks, with the EU remaining the biggest supplier, with a share of 67 percent.
Commenting on Turkey’s finished steel imports, Ms. Özbay underlined that over the past few months the price of import billet dropped below production costs, contributing to reduced production rates in Turkey. Turkey booked at least 500,000 mt of billet from Asia for October-November shipments. However, with the recent price rebound in China, there is talk in the market that at least three billet cargoes, consisting of 50,000 mt each, have been cancelled. Ms. Özbay noted that, if this information is true, it might mean that the mills who originally booked these cargoes will need more scrap than they had initially foreseen. If Chinese billet prices are sustained above $500/mt CFR, Turkish mills’ interest in scrap may increase in the remainder of the current year. Now that China is back from its holiday, and some say on a rather positive note, deep sea scrap prices in Turkey are expected to move up to $390-395/mt CFR, she stated.