Arab Steel Summit
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Arab Steel Summit

Report: Global scrap prices decline amid weak demand in Türkiye

Scrap quotations in the Turkish market for the week of March 20-27, 2023 decreased by $16 per tonne.

Last week, steel scrap prices continued to decline in international markets. The decline in raw materials purchases by Turkish consumers hurt global markets for the second week in a row.

From 20-27 March 2023, HMS 1/2 scrap prices in the Turkish market decreased by $16 per tonne, or 3.5%, compared to the previous week, to reach $441-444 per tonne.

Commodity prices have fallen in the Turkish market over the past two weeks as scrap supply has outpaced demand and local steelmakers are turning away from buying raw materials due to weak steel sales.

Lower demand for rebar in both the domestic and export markets is putting pressure on prices, forcing factories to stop buying scrap.

Suppliers, in turn, are sure that Turkish steelmakers have not completely closed the scrap need for April, so they are trying not to succumb to pressure. In addition, the confidence of scrap collectors is reinforced by the low rates of collection of raw materials in the European Union and the United States of America.

Most market participants believe that a downside in such conditions is more likely than an upside and some expect another $10-15/tonne drop in the scrap price in the short term at $430/tonne.

At the same time, while Turkish steel manufacturers are refusing to buy and trying to lower the prices of raw materials as much as possible, suppliers from the United States are directing goods that were to be delivered to Turkey to alternative markets, and this may lead to a jump in scrap prices for Turkish steel manufacturers in the future.

In addition, the price of scrap metal in the European Union is under the influence of the Turkish factor, as scrap prices in Italy decreased last week by 10-20 euros/t compared to the price at the beginning of March, and the costs of raw materials vary from 380 euros/t to 440 euros/t depending on the class.

Scrap prices in the European Union are likely to decline or become slightly flat in April, as demand from steel mills is expected to be strong. However, uncertainty in the steel market will hamper purchases and steel manufacturers may resort to shutting production down to balance supply and demand for finished steel products.

The USA market was also affected due to the lower activity of Turkish buyers, and participants did not expect a downward trend, as they were confident about Turkish demand.

On the east coast of the US, scrap prices last week were at $414-419/tonne compared to $436-441/tonne a week ago, and local traders do not expect a recovery in prices in the near term as Turkish demand will not recover until steel prices stabilize.

Scrap prices in China also fell last week as of March 24 as raw material prices in eastern China reached 3.04 thousand Yuan/tonne ($442/t), down by 95 Yuan/tonne from the previous week. The pessimistic situation in the steel market forced local steelmakers to reduce production and scrap consumption.

Scrap metal collection volumes in Ukraine in January-February 2023 decreased by 70.8% compared to the same period in 2022, reaching 152.2 thousand tonnes. Raw materials exports during this period amounted to 24.8 thousand tonnes, 3.5 times more year on year.






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