Turkish scrap purchases rise sharply in November

Turkish steelmakers' purchases of deep-sea bulk ferrous scrap cargoes increased sharply on the year and month in November, according to Argus records.

Turkish mills bought at least 47 deep-sea cargoes in November, equating to a minimum of 1.398mn t. This compares with 1.06mn t tracked from a minimum 31 cargoes in November 2019, and 1.17mn t from a minimum 39 cargoes in October.

The Argus cfr Turkey steel scrap assessment rose by $64.50/t between 1 November and 30 November to $357.50/t cfr.

Turkish scrap purchasing surged last month, with appetite for seaborne cargoes in the first half of November at its highest this year after months of pent-up demand caused by the Covid-19 pandemic was released. Between 1 November and 23 November, the Argus daily cfr Turkey scrap and fob steel rebar assessments rose by $41.90/t and $46.50/t, respectively.

Scrap demand in Turkey was further supported by a rise in domestic steel demand in the second half of November. Between 19 November and 26 November, the Argus cfr Turkey scrap assessment and weekly Turkish domestic rebar ex-works assessment rose by the equivalent of $19.20/t and $34.65/t, respectively, as mills were able to widen margins on domestic rebar sales against imported scrap purchases.

The strength of Turkish steel sales caused steelmakers to buy a record number of cargoes two months in advance for January shipment, lifting the rise in November scrap purchases beyond the typical seasonal increase.

A significant number of continental European cargoes were sold into Turkey in November — at least 18 totalling at least 519,000t. This compares with just six cargoes sold at lower prices in October. At least 12 Baltic/Scandinavian cargoes for a combined 369,000t were sold into Turkey, the same number of cargoes as in October and up from eight in September. A minimum of seven deep-sea cargoes totalling 222,500t were sold out of the Americas, down from 11 in October. And at least six UK cargoes were sold for a combined 183,000t, along with three Russian cargoes totalling 74,000t.

Higher continental Europe-Turkey trading in November means mills now need more material from the US, with a large volume expected to trade in the first half of December.

The sharp appreciation of the euro against the US dollar this week will deter many European and Baltic exporters from offering new cargoes in the coming days, although availability from these sources is in any case limited after the numerous deep-sea sales in recent weeks.

By Alex Reynolds