Turkey ferrous: Price up, domestic rebar demand soars

The Turkish scrap import price increased on Tuesday as the bid-offer range moved up following on from a Baltic sale heard concluded at a higher level late last week.

The Argus daily HMS 1/2 80:20 cfr Turkey steel scrap assessment increased $4.80/t to $453.80/t.

A Baltic supplier was heard to sell HMS 1/2 80:20 at $452.50/t and bonus at $462.50/t cfr Izmir for June shipment on 29 April following a continental European supplier's sale to an Iskenderun mill on the same day. A total of 19 deep-sea cargoes have traded so far for June shipment, according to Argus records.

Exporters lifted target offer indications higher towards $460/t today, with very few heard to target an equivalent sales price of around $455/t cfr Turkey for premium HMS 1/2 80:20. The lack of overall sales appetite in the past week has been a marked contrast to the consistent sales appetite to Turkey during the previous 10 weeks.

Turkish domestic rebar demand increased sharply yesterday, resulting in the highest USD-equivalent trading price levels recorded by Argus in the six years that it has assessed this market.

Sales made by Turkish mills yesterday were the equivalent of $35/t higher than they made on the previous business day. Scrap-domestic rebar margins have increased to the levels of scrap-export rebar margins, sparking strong scrap demand in the process. Most mills wish to do back-to-back business.

A Marmara mill sold 5,000t of rebar at $675/t ex-works yesterday and an Izmir mill sold 30,000t at $655-660/t ex-works. The Izmir mill was heard to sell rebar to Chile at $680/t fob, equivalent to around $667/t fob base price before additional costs are included, and today offered $675/t ex-works locally.

Marmara mill sales prices are around $15/t higher than they were in December 2020-January 2021 when domestic prices peaked. Rebar offers in Marmara reached $685-690/t ex-works today. The demand this past week has been spurred by a combination of a lack of stocks, strong mill export business leading to limited availability, and the official removal last week of China's export tax rebate.

The combination of strong local and overseas demand for Turkish rebar in the past week and the consolidation of scrap-rebar spreads well above $200/t in both markets has played a large part in scrap import prices increasing rapidly.

A change in scrap exporters' urgency to sell following on from the confirmation of China's elimination of the tax rebate on steel exports has combined with the steel market fundamentals to provide this sharp upward price pressure.

Short-sea Turkish imported scrap prices increased after a Romanian supplier was heard to sell HMS 1/2 80:20 at $425/t cif Marmara on 29 April.

The Argus daily A3 cif Marmara steel scrap assessment increased $7.50/t to $427.50/t.