Turkey Scrap Metal Prices Surge by $28 Per Tonne in September

In September, regional scrap metal markets underwent mixed trends, with prices in Turkey, the US, and Germany showing an upward trajectory after the summer downturn. Conversely, the Chinese and Italian markets saw price decreases of $9 and $13 per tonne, respectively. In Turkey, the cost of imported scrap metal rose, starting at $380–382 per tonne CFR (HMS 1&2 80:20) and reaching a peak of $402 - 404 per tonne CFR by the third ten-day period. The average price for HMS 1&2 80:20 scrap increased by $28, settling at $400 per tonne CFR. However, by month's end, the market stabilized; buyers resisted further price hikes and secured European scrap contracts at $395 per tonne CFR, with domestic scrap prices rising in tandem with imports.

Throughout September, market sentiment evolved from initial fervor and mills' enthusiasm to replenish stocks to a phase of stagnation, caution, and buyer pressure. These high raw material costs were counteracted by declining demand for finished steel and reinforcing bars, alongside the necessity for quarterly interest payments and a liquidity shortfall faced by steelmakers.

• Primary factors influencing the situation are geopolitics and the search for alternative raw materials
• Disruption in the supply of billets and pig iron from Russia and Ukraine
• Scrap is the only viable raw material for Turkish electric arc furnaces (EAFs)
• Soaring diesel prices with oil prices climbing above $105 per barrel
• Record freight rates of $50 per ton from the EU and $60 per ton from the US
• Significantly increased delivery costs
• Challenges in the collection and delivery of scrap metal due to low water levels in European rivers

Turkey's Scrap Imports Slightly Rise in August

The Turkish Statistical Institute (TUIK) reported that Turkey's scrap imports in August amounted to 1.4 million tonnes, marking a slight increase of 0.5% compared to the same month last year, although this figure was lower than July's 1.66 million tonnes. From January to August, imports grew by 3.9%, reaching a total of 12.8 million tonnes. In August, the largest suppliers were the US with 269,000 tonnes, the UK with 224,000 tonnes, and Russia with 127,000 tonnes.

Looking ahead to October, a mild correction or stabilization of import prices is anticipated in the $390 - 400 per tonne CFR range. The expected increase in domestic scrap prices in the US, by $10 - 20 per tonne, and in the EU, by €10–15 per tonne, is likely to support these prices. However, further growth may be limited by the sluggish Turkish rebar market and high energy costs.