[SMM Türkiye Weekly Review] Scrap Costs and Export Orders Resonate; Domestic & Export Prices Rise Across the Board

EU HRC prices climbed early this week before entering a consolidation phase. The Northwest European index rose to €744.50/tonne EXW (approximately $864/tonne EXW) on Monday before easing to €736/tonne EXW (approximately $854/tonne EXW) by Friday, remaining broadly stable on the week. The Italian index settled at €734.25/tonne EXW (approximately $852/tonne EXW) on Friday, up €2/tonne on the day but little changed week on week, while gaining approximately €15/tonne from August 25. Transaction levels varied considerably. A northern European mill reportedly sold around 10,000 tonnes at €740-750/tonne EXW (approximately $858-870/tonne EXW), while a 2,000-tonne November-delivery lot in northern Italy changed hands at €750/tonne EXW, with larger volumes negotiable at €735-740/tonne EXW. However, actual transactions among core Northwest European buyers remained lower at €715-720/tonne EXW (approximately $829-835/tonne EXW). Mills’ November offers of €750-770/tonne EXW and test offers at €790/tonne EXW attracted limited acceptance, while portside material was available at €730/tonne (approximately $847/tonne, loaded). Supply-side disruptions remained frequent. ADI Taranto faced critically low raw-material inventories, while Metinvest Valsider, with combined plate and HRC capacity of 800,000 tonnes/year, ended its force majeure and was expected to resume production over the weekend. Europe’s blast furnace operating rate stood at 68.58%, while TTF natural gas prices approached €80/MWh, the highest level since December 2022. Import activity also picked up. Italy’s import assessment rose by €5/tonne on the week to €580/tonne CIF (approximately $673/tonne CIF), with Indian offers at €615/tonne CIF (approximately $713/tonne CIF) and Turkish offers at around $600/tonne FOB. Nevertheless, the 50% tariff on out-of-quota volumes and CBAM requirements for product-level emissions data continued to discourage firm bookings. First-quarter delivery offers were already seen above €750/tonne DDP (approximately $870/tonne DDP). Long steel markets diverged: Germany’s monthly rebar assessment fell by €17.50/tonne to €665/tonne DEL (approximately $771/tonne DEL), while Italy’s weekly rebar assessment increased by €15/tonne to €705/tonne EXW (approximately $818/tonne EXW). An industry survey showed that 44% of respondents expect Northwest European HRC prices to range between €750 and €800/tonne EXW (approximately $870-928/tonne EXW) in Q4. Outlook: Looking ahead to next week, import booking activity may accelerate ahead of the opening of the new quarterly quota window on October 1. Domestic HRC indices are expected to consolidate within €730-745/tonne EXW, with the direction of fourth-quarter contract negotiations remaining the key market driver.

Price volatility in the Middle East was limited this week, with market tensions focused primarily on logistics and costs. In the UAE, ECAS-certified Asian billet landed at approximately 530 USD/tonne CFR (with contracts including Strait of Hormuz rerouting clauses). Domestic billet in Saudi Arabia and Oman was priced at 645 USD/tonne DEL, with prompt cargoes commanding a premium of 15–20 USD/tonne, as war risk insurance and rerouting expenses continued to inflate landed costs. Emirates Steel maintained its September rebar ex-works price unchanged. North Africa displayed clear divergence: Egypt's domestic rebar price stood at 30,000 EGP/tonne (incl. VAT, equivalent to roughly 587 USD/tonne EXW excl. VAT), up 300 EGP/tonne for the month, while rebar import offers from Türkiye stood at 590 USD/tonne FOB, marking a weekly increase of 10 USD/tonne. Meanwhile, Algeria's domestic rebar was quoted at 118,000–120,000 DZD/tonne EXW (902 USD/tonne EXW). In terms of trade flows, Chinese billet exports to the UAE have plummeted by 1.42 million tonnes year-on-year so far this year, with some volumes being rerouted through Oman (which saw a YoY increase of 380,000 tonnes), signaling an ongoing restructuring of Gulf import channels. Iranian resources were previously offered at around 415 USD/tonne FOB, but no new quotes emerged this week. Looking ahead to next week, rising Turkish offers will elevate North African import costs, while the Gulf region will track the upward shift in Asian billet quotes. However, flat end-user demand will cap potential gains, keeping the overall market in a range-bound posture.

There have been no price changes at all since last week: wire rod (495→505 USD/metric ton), slab (480→485 USD/metric ton), HRC (515→525 USD/metric ton), and billet (475→480 USD/metric ton). This is due to the “wait-and-see” situation that has persisted since last month. Additionally, information regarding external factors, such as products from China, is minimal or nonexistent, as Chinese suppliers are currently reluctant to lower their prices. Currently, there are reports that the Indonesian rupiah may strengthen, but its impact on prices is minimal. If these conditions persist, no price movements are expected, as it appears no party is willing to take the first step—unless a major event occurs, such as the Formosa incident, or a significant and sudden catalyst triggers a shift, in which case the market will react immediately.