Turkey’s scrap import and rebar export markets have been unmoved this week, with the most-pressing news that electricity prices for Turkish industrial consumers have increased by 14%, market participants tell Kallanish.
Only one scrap booking has been heard this week, from the Benelux for 20,000 tonnes of HMS 1&2 75:25, 12,500t bonus and 2,500t new cutting at an average of $328.5/tonne cfr Turkey. This represents a further decline for Benelux-origin scrap prices. No North American-origin deals were heard.
Turkish mills have maintained rebar export offers at $540-545/t fob Turkey, with one trader suggesting $535/t is workable, but “… nobody is buying, nobody is selling,” says a Turkish trader. “The lira-dollar exchange rate is still a problem,” he adds. The lira dropped to 5 per dollar this week for the first time in history. Turkey’s central bank revised its 2018 inflation forecast to 13.4% from the previous 8.4%, despite interest rate hikes of 500 basis points since April.
Turkish state-owned pipeline operator, Botas, meanwhile, hiked lira-denominated gas prices for industrial customers by 14% from 1 August (see Kallanish 1 August). This has caused concern among Turkish steelmakers who also continue to face high graphite electrode prices. One Turkish trader, however, says the hike should not hamper major mills too much since they earn in dollars which they can use to offset the higher gas prices.
According to fresh Turkish Statistical Institute (TUIK) data, Turkish rebar exports slumped -19% on-year in June to 359,324 tonnes, only slightly higher than the 2018-low tonnage registered in May (see Kallanish passim). This was mainly due to a decline in shipments to Yemen and Israel, on which Turkish exporters have been relying heavily in recent months after the closure of other traditional major markets.
Turkish Steel Exporters Association (CIB) board chairman Namik Ekinci told Reuters this week that Turkish steelmakers are targeting increased exports to West Africa and other emerging markets. This is in response to trade barriers that threaten their sales to the US and EU.