Posted on 22 Sep 2022
Most steelmakers have kept their domestic scrap buying prices unchanged since last week, Kallanish notes. However, this is likely to change after today as the Turkish steel market has experienced a resumption following the Russian president's announcement of partial mobilisation in his country on Wednesday.
The Turkish market, one of the major buyers of Russian billets and slabs, is concerned with the announcement of mobilisation in Russia, which points to the further escalation of the war in Ukraine. Although Turkey's Russian material preferrence was decreasing following the US' warn of imposing sanctions to Turkish companies that trade with Russia, Russian prices were still impacting the Turkish market. However, the stronger possibility that Russian material will no longer be available caused the Turkish market to panic and steel demand to increase.
Kardemir, which opened billet sales a week ago and failed to shift volumes since then, sold 30,000 tonnes on Wednesday and closed sales. On the other hand, Turkish producers, having offered rebar at $665-680/t ex-works levels in the morning, closed sales following the Russia news.
Turkish mills, which have been trying to push scrap prices down, increased their scrap demand sharply on Wednesday. After the Baltic-origin HMS 1&2 80:20 sale at $350/t cfr earlier this week, no fresh sales were heard. With the resumption of demand on Wednesday, scrap suppliers that are aiming to sell at higher prices have backed off from the market.
A Turkish mill tells Kallanish: "As an immediate effect, this situation may carry prices to higher levels and trigger the acceleration of delayed demand. However, the sustainability of the improvement remains an issue,"
Mills are seen trying to weigh the actual demand level and scrap prices before offering finished steel and keeping their sales closed. They are expected to open at higher levels.
Turkish shipbreaking scrap prices are at $345/t delivered this week, down from $345-350/t last week. The lira stood at 18.33/$1 at business close on Wednesday.
Source:Kallanish
