Turkish scrap imports down by almost 30pc in June

Turkish ferrous scrap imports fell by 29pc on the month to 1.286mn t in June as deteriorating global economies resulted in infrastructure projects being put on hold in the latter part of the second quarter.

Turkish mills have only imported less scrap this year in January and February, following a cut of 25-33pc in capacity utilisation rates during the winter. Turkey imported 1.239mn t and 943,622t in January and February, respectively.

June imported volumes were down by 599,000t from 1.835mn t in June 2018, the Turkish statistical institute said.

Imports of US-origin scrap were down by just under 50,000t on the month to 263,403t in June. A significant price increase in the US domestic market at the beginning of June put US domestic prices back on par with Turkish import prices.

Netherlands-origin scrap imported in June was considerably down relative to other supplying regions. Turkey imported 129,177t of scrap from the Netherlands in June, down by 43.5pc and 56.1pc compared with May and April, respectively. Strong domestic scrap demand in Germany during May and June helped to keep scrap away from Dutch ports, but it was the increase in the Netherlands' exports to Egypt heard during May that is likely to be a major reason for the far lower volumes sold into Turkey.

The same can be said of Belgium and the UK, both of which were also heard to have received strong demand from Egypt in May and June. Belgium-origin scrap imports into Turkey in June were down to 40,000t from 149,372t in May, while UK-origin imports were down by over 100,000t to 150,841t.

The increase in Egyptian demand in May and June played a part in preventing a more significant decrease in the Turkish scrap import price during a period in which Turkish steelmakers' sales volumes decreased.

The Egyptian government imposed safeguard duties of 15pc on billet imports and 25pc on rebar imports on 15 April 2019, and Egyptian mills were first heard to have started increasing scrap import demand in response at the start of May. The lack of demand from Turkish mills allowed Egyptian importers to keep their own import prices steady throughout May but contributed to supply tightness and maintained global seaborne price levels in the face of weakening global steel demand.

Turkish imported volumes of Lithuanian scrap were only a single Baltic deep-sea cargo short of Netherlands-origin and UK-origin volumes in June, totalling 103,797t. This is the largest volume of Lithuania-origin imports into Turkey recorded this year. But the previous highest volume month for imports from Lithuania was in June last year, which indicates an exporter in the region traditionally sells large quantities of stock around May.

Turkey's loss of major steel customers as a result of US and European import tariffs is set to keep their third-quarter 2019 monthly ferrous scrap import volumes far below the 2.016mn t and 1.812mn t they imported in April and May, respectively.