Posted on 11 Mar 2022
Turkish steelmakers are estimated to have sold up to 2.4mn t of steel since Russia's invasion of Ukraine on 24 February.
Argus estimates that 2.3mn-2.4mn t of steel has been sold by Turkey overseas and locally since it became an even more dominant steel player following the damage to Ukrainian infrastructure and the sanctions on Russia. Around 1.25mn t of rebar is estimated to have been sold by Turkey, and around 500,000t of billet.
Turkish steel output in 2021 stood at 40.4mn t, for an average of 1.554mn t for a two-week period. That indicates that Turkey has sold around 800,000t more steel in the past two weeks than in the average two-week period in 2021.
Turkey is not only receiving stronger demand from those countries it was in competition with Russia and Ukraine for, such as Egypt, but is also receiving completely new demand from countries which were previously importing from Russia and Ukraine and who have had to turn to Turkey to fulfil their requirements.
Argus estimates that only around 900,000t of scrap has been purchased from deep-sea and short-sea markets since the Russian invasion, meaning that they have only covered around 40pc of their steel sales via scrap purchases. Turkish steelmakers are not likely to have had high levels of scrap stock in the days preceding the invasion either, as the majority of Turkish scrap importers expected prices to come under downward pressure from the end of the third week of February. This will keep Turkish scrap import demand at very high levels for the foreseeable future.
There has been stronger scrap sales appetite to Turkey since 4 March, which is allowing Turkish steelmakers to improve their scrap-rebar sales margins as they procure more scrap at a slower rate of price increase than that at which Turkish rebar sales prices are still rising this week, and in large volumes. Since scrap sales appetite increased on 4 March, the Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment has increased by $29/t to $655/t cfr yesterday, and the Argus daily fob Turkey steel rebar assessment has increased by $55/t to $940/t fob yesterday.
Argus estimates that Turkish scrap importers will in total purchase around 110 deep-sea cargoes for April and May shipment based on their higher volume of steel sales, and the reduced number of billet, pig iron and slab options now. But Turkey has not sanctioned Russia since its invasion of Ukraine, and pig iron, slab and steel products are still being sold from Russia to Turkey, just in a far lower number than previously. One source said that trades were taking place at "risk discount" between Turkey and Russia this week, and that payments were in Turkish lira to Russian banks. CIS slab was heard sold into Turkey this week at $880-900/t fob, compared with Brazilian slab being offered at $1,000/t fob today. Some 10,000t of Russian pig iron was sold into Turkey in the middle of the week at $770/t fob for end-April shipment, which compares to an Indian pig iron cargo sold into Turkey in the middle of the week at $860/t cfr Turkey.
Source:Argus Media
