While Turkey has made a relatively quiet start to the first week of 2024, the future expectations in terms of prices in its import scrap market still vary. Some market players believe that the downward trend has come to an end with the number of willing buyers increasing in Turkey, while others believe that the finished steel market still does not provide support for any increase in scrap purchase prices.
SteelOrbis has heard that an Iskenderun-based Turkish producer has concluded an ex-UK booking for HMS I/II 80:20 scrap at $405/mt CFR. Although this deal has not been confirmed by the buyer or the seller, market players believe it has actually been done. According to some sources, the deal consists of 10,000 mt of HMS I/II 80:20 scrap, 5,000 mt of bonus grade scrap and 15,000 mt of pipe and busheling scrap. This was SteelOrbis’ estimated reference price for ex-EU benchmark scrap after ex-Baltic deals were closed at $410/mt CFR, and so no change will be made to the price.
SteelOrbis observes that, as of today, January 3, the number of scrap offers to Turkey and the number of active buyers seeking cargoes for February shipment are closer to each other. Following the transactions done over the past week, sellers have stopped offering lower quotations. On the contrary, it is heard that some sellers are now standing firm in terms of their offers to Turkey, with some even increasing them. Today a seller commented, “Turkey needs deep sea cargoes to be shipped in early February, and hence a $5/mt increase for ex-EU cargoes can be expected.” Another market player was not so sure, stating, “I think finished steel demand is still not enough to support a recovery in scrap prices, despite Turkey’s introduction of a temporary safeguard measure for wire rod imports. Meanwhile, collection prices in the EU are moving down.” Collection prices in the EU have declined to €325/mt DAP this week, around €10/mt lower than the levels recorded before the New Year holiday. Another source reported that scrap flow to Netherlands-based ports will be very slow if prices are reduced below €330/mt DAP. The euro-US dollar exchange rate stands at 1.09 today and is still causing difficulty for European scrap suppliers. “Sellers have an advantage: Turkey needs to buy a lot of cargoes for February shipment. Traditionally, prices remain firm ahead of the Chinese New Year [starting on February 10]. However, we do not expect a big price surge in the coming period,” a source at a Turkish mill reported.
As mentioned above, an important development has been the new safeguard duty in Turkey. Turkey has announced the preliminary results of its safeguard measure investigation on alloyed and non-alloyed wire rod imports, according to a statement published in the country’s Official Gazette. A temporary safeguard measure of $175/mt has been introduced for wire rod imports for 200 days. There are also rumours of wire rod contracts cancelled for Chinese wire rod as a result of the new taxe. While some market players believe this may be another factor supporting scrap prices in the coming period, others are not so sure. Meanwhile, due to the problems affecting containerized shipments going through the Red Sea, scrap exports to India, Pakistan and Bangladesh may be compromised. Freight rates to the region have increased sharply due to the military activity in the Red Sea.