Since the beginning of Russia’s invasion of Ukraine, Turkey’s import scrap market has remained relatively silent with some deals concluded and each one indicating a higher price level. The uncertainties in the region are reflected in the international steel market, including the scrap segment, as two critical suppliers are now out of the market. Hence, Turkish buyers are making inquiries for scrap but are mostly failing to agree with sellers on prices. Sellers are in no rush to conclude sales to Turkey or anywhere else as they are trying to evaluate the situation and decide where prices will go.
SteelOrbis has heard that an ex-EU scrap deal was done by an Iskenderun-based mill with HMS I/II 80:20 scrap at $517/mt CFR. Although this transaction has not been confirmed by the buyer or the seller, it is widely believed to have been done. The level is $14/mt higher than the price in a previous contract signed with a German supplier. Having said that, it is not sure that another ex-EU deal can be closed at around this level since steel prices are moving up at a fast pace.
Also, an ex-US scrap cargo is reportedly to have been sold to an Izmir-based mill at $520/mt CFR for benchmark grade last weekend. This level was $8.5/mt higher than the average in previous deals.
Over the past week, Turkey has sold approximately 200,000 mt of billets starting from levels in the $720s/mt ex-work, with the price continuing to rise in each deal. Domestic billet prices Turkey have reached $785/mt ex-works today, March 1. “There is a big shortage in the market for billets as all orders from Russia and Ukraine have been canceled due to the war,” a source reported. “Prices for flats and billets will continue to rise by the time these canceled tonnages are supplied by other producers,” another source commented. SteelOrbis hears that a bid from Turkey for ex-US HSM I/II 80:20 scrap at $525/mt CFR was declined by a seller yesterday. Some players report that $530/mt CFR or even $540/mt CFR is workable for this grade as of today. A German supplier has reported that it is waiting for at least a €20/mt rise in its domestic collection quotations with the support of German government’s decision to modernize its army with a budget of €100 billion. “We are not sure about the full impact of this decision on the scrap market yet,” the source added. All market players admit that it is too early to say where the peak will be reached in terms of prices in the international steel market due to various variables. “We do not know how long it will take this war to end. It will not only impact the steel market but also energy costs, other raw material prices and of course have economic consequences due to the sanctions,” one player stated.
On the short sea side, a Bulgarian cargo was sold at $495/mt CFR Turkey for HMS I/II 80:20 scrap earlier this week. “This level is not considered workable anymore amid the increasing demand for scrap,” a short sea seller reported. For HMS I/II 80:20 scrap from Romania and the Adriatic, workable levels are mostly in the range of $510-515/mt CFR, indicating a sharp increase once again.