Scrap prices in Turkey have continued their decline on the latest deal concluded by a European supplier, notes Kallanish.

The supplier sold 25,000 tonnes of HMS 1&2 80:20 at $368.5/tonne and 10,000t of bonus grade at $390.5/t cfr Turkey, causing scrap prices to hit their lowest level since October 2023. Although a UK-origin deal was concluded at $368/t cfr for HMS 1&2 80:20 in the first week of March, it was not representative of the market at that time due to its perceived poor quality, and was not repeated.

Bearish sentiment is weighing on the Turkish scrap market amid diving Chinese futures, lower-priced Asia-origin billet offers in Turkey and weak steel sales. Although imported billet prices initially recovered after hitting $480-485/t cfr Turkey levels at the end of July, offers from Asia have fallen back to $480-484/t cfr this week.

A supplier expects scrap prices to fall further, below $350/t cfr Turkey for EU material.

An agent for various suppliers says: “It is very hard to talk about prices. Although I was not expecting prices to fall below $380/t cfr, they declined below $370/t cfr. I feel that we are approaching the bottom as none of the suppliers I represent can afford current levels. They are following a wait-and-see stance and avoiding placing offers.”

Another supplier says: “If this imported billet business hadn't become active again, I wouldn't have expected $360/t cfr levels. But now I believe mills will push for the low $360s for European material. European suppliers can get out of this chaos in September when the EU is back from the holidays.”

Some Benelux suppliers have been forced to decrease their dock prices below €300/t ($329) delivered amid collapsed prices in Turkey and the strong euro, at $1.097 at business close on Tuesday. However, material inflow remains an issue amid holidays. On the other hand, some other suppliers, who are struggling to see a clear picture of the market, have halted collection.

Meanwhile, other destinations are not helping European suppliers either. The price of European HMS 1&2 80:20 in Egypt is seen to have approached the low $370s on the latest deal, while containerised shredded prices in India decreased by $5-7/t on-week to $402/t cfr amid dull steel demand and excess direct reduced iron supply.

In the short-sea market, suppliers are suffering from a strong euro and tight supply, targeting to sell at above $370/t cfr Turkey. However, no mill in Turkey is ready to accept such levels for short-sea material, following the latest EU-origin deal.

Turkish rebar producers are meanwhile seen to have lowered offer prices amid weak demand. Rebar offers to the EU and Yemen stand at around $575/t fob Turkey actual weight and $550/t fob theoretical weight respectively. In the domestic market, mills’ official offers stood at $580-605/t ex-works on Tuesday amid weaker demand.