Is Decline In Turkish Demand Leading To A Drop In Global Scrap Steel Prices?

The scrap steel market has been experiencing a price decline for the second consecutive week (20 March 2023-27 March 2023) due to decreased purchases by Turkish consumers. This decline in Turkish demand impacted negatively on the global markets, leading to a decrease in scrap prices across the European Union, the United States, and China.

Turkish Vendors’ Resistance

Scrap vendors are resisting the downward pressure on prices as they remain confident that Turkish steelmakers will still require scrap in April 2023. Additionally, the low rates of raw material collection in the EU and the USA have contributed to scrap collectors’ trust.

International Market Experience Price Drops

Let’s explore more about the impact of decreased steel demand across the globe:

• European Union- Due to the Turkish demand factor, the scrap metal price has also declined in the European Union. The rates in Italy dropped by $10.87 to $21.74/ton last week, depending on the quality, ranging from $412.98 ton to $478.19/ton. Steel mills are anticipating robust demand but uncertainty in the market is preventing purchases, resulting in EU scrap prices likely to remain slightly lower or unchanged in April 2023.

• USA- The USA market has also suffered from the lack of action by Turkish buyers. Scrap rates on the East Coast of the United States were $414-419/ton last week, down from $436-441/ton the previous week. Local traders do not anticipate a price recovery in the immediate future as Turkish demand won’t improve until steel prices stabilize.

• China- Last week, scrap prices in China also fell. East China’s raw material costs were around 3,000-3,170 yuan/ton ($436-460/ton) as of 24 March 2023, down 95 yuan/ton from the previous week. The unfavorable market conditions led to local steel producers cutting back on both output and scrap consumption.

Insight

During 20 March 2023-27 March 2023, the cost of HMS 1/2 salvage on the Turkish market fell by $10-15/ton (3-4%), reaching $441-444/ton. That’s why the scrap steel market is facing downward pressure due to decreased purchases by Turkish consumers. While vendors remain confident about Turkish demand in April 2023, steel mills are hesitant to make purchases due to uncertainty in the market. This may lead to a halt in production, which can further impact the global steel industry.

Read more: Indian Domestic Scrap Market Faces Volatility: Will Import Offers Decline?

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