Turkish mills had the lowest scrap-to-rebar price spreads last month since January 2017, according to the latest Irepas monthly outlook.
Turkish producers are trying to widen this spread but for now, they’re focusing on exerting downward pressure on scrap prices rather than requesting higher sales prices. The recent production cuts implemented by the mills are not supporting prices either even as demand shows no signs of picking up and margins remain low.
The declines in Turkey are following a global decrease in scrap prices. European scrap dealers were the first to decrease prices in Turkey, putting even more pressure on long products prices in the country. On the other hand, iron prices remain high and are expected to remain stable at around $80/mt cfr China main ports according to Irepas data.
For long steel products, the data indicated that supply exceeded demand in this market. The profitability and margins of steel producers also varies greatly between regions amid several factors such as the coronavirus outbreak and geopolitical issues are creating uncertainties for the future.
Overall, Irepas indicated that competition remained high in most markets and may even increase further in H2 2020.