Turkish ferrous scrap imports rise sharply in March

Turkey's ferrous scrap import volumes in March almost doubled from February, Turkish customs data show, boosted by the highest demand for the country's finished steel products tracked in 2019 to date.

Turkish scrap imports for March stood at 1.716mn t compared with 936,000t of February imports, up by 83.3pc. March 2019 imports were down slightly compared with March 2018, which stood at 1.837mn t.

Imports of US-origin material were virtually flat on the year, while imports from the Netherlands rose by 117,000t and shipments from Russian fell by 103,000t in the same period.

Turkish steel mills significantly cut production levels in January, with some reducing rebar output by 50pc. This significantly diminished their demand for scrap imports in February, during which time there was no domestic steel demand and no large tonnage overseas demand.

But the limited scrap supply from exporters during winter months combined with the iron supply shock announcement from Brazilian producer Vale at the end of January fuelled expectations that lower raw material availability would drive up steel prices.

This invigorated some Turkish domestic steel demand at the same time as local stockists maintained low stock levels. Even end-users bought into the theory that raw materials could drive steel prices, stockists said at the time.

A growing expectation from Turkish mills that Chinese steel prices would increase significantly during March and April also led them to procure imported scrap volumes for more than just the back-to-back business that they had previously been pursuing. They were correct with their expectations as they later sold large tonnages of rebar and wire rod to southeast Asia for April, May and June shipment.

A Turkish flats producer purchased multiple scrap cargoes at the end of January for six-seven week lead times, for March arrival, reflective of the lead times for hot-rolled coil.

Turkish mills received strong demand from Europe at the end of January and beginning of February as European steel importers looked to secure Turkish material for the 1 April quarterly quota, which allocated 133,000t of rebar to Turkey.

Having bought only 936,000t for February shipment, Turkish mills had to significantly increase their scrap import volumes in March to meet the renewed demand.

Imports of US-origin scrap rose most sharply in March, reaching 335,775t compared with February imports of 185,296t.

Imports of Netherlands-origin material increased, hitting 291,135t in March, up from 115,675t in February.

Imports of Belgium-origin material increased to 174,664t in March from 33,753t in February.

Imports of French-origin material increased to 75,293t in March from 13,634t in February.

UK-origin material more than doubled in terms of Turkish March imports, standing at 211,624t in March, up from 96,997t in February.

Imports of Russian-origin material increased by almost half, reaching 150,795t in March, up from 106,652t in February.