The interweaving of the US scrap metal markets and Turkey's rolled metal markets

Given that one country is the world's largest exporter of scrap metal and another is the world's largest importer of scrap metal, the United States and Turkey seem inextricably linked.

Market dynamics and perhaps even the forced intervention of American scrap metal dealers and Turkish steel mills this decade have led to a slight disentanglement of the two markets.

However, American scrap metal dealers and Turkish factories remain each other's largest customers. This may change as the US raises tariffs on Turkish steel up to 50%. Scrap is not included in any tariffs at the moment, but if Turkish rebar sales in the US are slowing, they may not need or be able to afford to buy American scrap. “I really want to see the impact of the 50% tariff,” said one American scrap metal exporter.


And the threat of scrap tariffs is also ubiquitous in the trade policy environment beyond the line that has swept the steel market this year. Turkey, which sets tariffs on US scrap, could harm its metallurgical industry, which used 30.3 million tonnes of scrap steel in 2017, of which 21.0 million tonnes were imported.


On the other hand, in the first half of 2018, Turkey was able to increase its purchases of Russian scrap metal by 60% to 1.33 million tonnes. Previously, Turkey had all the main sources of scrap metal: the United States, Britain and Russia. Since then, Turkey has added Belgium and the Netherlands to the list of suppliers of 2 million tons per month.

US scrap shippers were also able to diversify their shipments, shipping record numbers in 2017 to Mexico (1.66 million tonnes), Pakistan (691,055 tonnes) and Bangladesh (619,899 tonnes).

Regardless of whether its market dynamics or intentional efforts take new directions, the US scrap metal and the Turkish steel market still seem to be highly dependent on each other.