Turkish steel scrap import prices fell this week on poor demand from steelmakers and may fall further if tensions in North Africa and the Middle East continue to affect Turkey's steel sales to key consumers.
The world's top consumer of steel scrap, traders quoted prices for Turkey's steel scrap imports at $440-450 per tonne cost-and-freight (CFR) Turkey this week, down from $455-465 two weeks ago.
Steel scrap is a key raw material for steel long products such as billet and rebar used in construction, and Turkey's import prices represent a benchmark for international prices.
"Major consumers of Turkish billet and rebar are in North Africa and the Middle East. If nothing changes I wouldn't be surprised to see scrap prices go down further," said a European steel scrap trader.
Political tensions in North Africa and the Middle East are hindering trade and slowing investment in construction in the area, which is a major importer of Turkish steel.
Turkish steelmakers have bought only three deep-sea cargoes of scrap this week, from the United States and Europe, traders said.
Steel scrap inventories at Turkish steel mills were running low but steelmakers were waiting for lower scrap prices before buying new cargoes.
"Everybody has to book scrap now but the steel market is so bad that people are waiting," said a source at a major steel mill.
A European recycler was offering HMS 1&2 (70:30), a slightly lower than average quality of scrap, at $430 cfr but Turkish mills were not even counter-offering, he said.
Falling Turkish prices have influenced domestic prices in Europe, which fell by about $10-20 a tonne in the last couple of weeks, traders said.
Demand from China, the second-largest importer of steel scrap, was also weaker, putting further downward pressure on international prices.
"I don't think it's roses at the moment. There is a bit of downward trend in China, Thailand and India," said a second European trader.
Scrap merchants may have some problems controlling inventory levels as demand from major consumers sags.
"They have been used to Turkey, India and the Far East buying. If the major markets are not buying and domestic markets are not buying, at some point they will have to control stocks," the second trader said.