Turkey's scrap metal demand rebounds amid mobilization in Russia

Most Turkish steel producers have maintained their purchase prices for scrap in the domestic market since last week. However, things are about to change as the Turkish steel market reopened after the Russian president announced a partial mobilization in his country on Wednesday.

The Turkish market, one of the main buyers of Russian billets and slabs, is concerned about the announcement of mobilization in Russia, which indicates a further escalation of the war in Ukraine. Although Turkey's preference for Russian materials declined following the US warning of sanctions against Turkish companies trading with Russia, Russian prices continued to have an impact on the Turkish market. However, the higher likelihood that the Russian material will no longer be available has caused panic in the Turkish market and increased demand for steel.

Kardemir, which started billet sales a week ago and has not been able to change volumes since, sold 30,000 tons on Wednesday and closed sales. On the other hand, Turkish producers, who offered rebar at $665-680/t in the morning on an ex works basis, closed sales following the news from Russia.

Turkish mills, which have been trying to drive down scrap prices, sharply increased scrap demand on Wednesday. After the sale of HMS 1&2 of Baltic origin at 80:20 at $350/t cfr earlier this week, there were no new sales. With demand rebounding on Wednesday, scrap metal suppliers seeking to sell at higher prices pulled out of the market.

The Turkish mill told Callanish: “This situation could lead to a sharp increase in prices and an acceleration of pent-up demand. However, the sustainability of the improvement remains a challenge.”

It can be seen that the plants are trying to weigh the actual level of demand and scrap prices before offering finished steel and closing their sales. They are expected to open at higher levels.

Scrap metal prices in Turkey this week are $345 per ton compared to $345-350 per ton last week. At the close of trading on Wednesday, the lira stood at $18.33 per dollar.