Some Turkish mills have decreased their domestic scrap buying prices since last week despite the acceleration of the lira weakening versus the dollar, Kallanish notes. This is mostly due to the continuing decline in imported scrap prices.

A fresh deal concluded on Tuesday was heard in the market on Wednesday. A western Turkish mill bought US-origin HMS 1&2 80:20 at $378/tonne, and shredded and bonus at $398/t cfr Turkey. This points to another $7/t decline from the previous US deal concluded at the end of last week and a $42/t decline on-month.

Sentiment is weakening each day and the market is unlikely to see near-term support from China, where rebar and hot rolled coil futures continued to trade lower on Wednesday, after touching four-month lows on Tuesday. On the other hand, domestic scrap prices in the US and the EU are about to record sharp declines.

There is still a more-than-sufficient number of cargoes in the Turkish market, exerting strong pressure on prices.

Amid worsening sentiment, suppliers are seen revising their offers downwards. Despite the slight strengthening in the euro per dollar, European suppliers are seeking $375-380/t cfr Turkey levels for HMS 1&2 80:20 following the fresh US deal. However, Turkish mills are not rushing to conclude deals while prices are tumbling each day. Mills' price indications for US scrap stood in the low $370s on Wednesday.

A supplier, who foresees no recovery in the near future, compares the market to a bottomless pit. "No one was expecting prices to fall below $400/t a month ago. It is getting worse each day as there are no positive signs. I don't know where and when this trend will end," he adds.

A short-sea deal from Romania was concluded at $358/t cfr Turkey on Wednesday, down from deals at $365/t a day earlier and $385/t cfr last week.

"The price decline has accelerated. I think we will reach the $350/t threshold sooner," says a trader.  

Besides weak export sales, demand in the Turkish domestic rebar market remained sluggish on Wednesday amid numerous issues, with high financing costs having the biggest impact. Mills' offers stood at $595-610/t ex-works.

Meanwhile, Turkish shipbreaking scrap decreased to $375-390/t delivered on Wednesday from $375-413/t a week earlier. As a result of the faster lira depreciation, the Turkish currency hit 31.73 per dollar by Wednesday business close versus 31.19 last week.

Turkish mills' new cutting (DKP) scrap buying prices
Producer 28 February (TRY/tonne) 6 March (TRY/t) Change (TRY/t)
Erdemir 13,250 13,025        -225
İsdemir 12,925 12,700        -225
Kardemir 13,150 13,150          0
Çolakoğlu 12,805 12,805          0
Kroman 12,500 12,200        -300
Asil Çelik  13,190 13,190          0
Diler 12,250 12,250          0
Mescier 12,200 11,800        -400

Source: company information