“With the Turkish lira plunging... it is highly possible that ferrous scrap prices in Asia may drop further, [leading to] cheaper rebar offers to Asia,” a trader based in Southeast Asia said.

The Turkish lira has lost about 40% of its value against the US dollar so far this year, reaching a low of 7.24 lira to $1 on August 13, according to various media reports. And United States president Donald Trump's decision to double tariffs on Turkish steel to 50% has only exacerbated the problems in Turkey.

On Monday, the Central Bank of the Republic of Turkey increased its efforts to ensure financial stability, including reducing reserve requirements and providing liquidity to Turkish banks.

“[We] will closely monitor the [situation] and take all necessary measures to maintain financial stability, if deemed necessary,” the Central Bank of the Republic of Turkey said on August 13.

Prices in the Turkish ferrous scrap import market have plunged in recent weeks, dropping from $361.49 per tonne on June 26 to $329.95 per tonne on August 10 for US-origin material.

Scrap traders in Asia expect US-origin offers there to track the falls in Turkish import prices because sellers of US scrap will have no choice but to drop their offer prices to attract buyers in the region or risk the arbitrage window closing.

This is especially so for markets, such as Vietnam and Taiwan, which already take in US ferrous scrap.

“Scrap prices in Asia are likely to see some more softening in the near-term before reaching the bottom,” a Japanese scrap trader said.

Metal Bulletin's price assessment for scrap prices in Asia was $320-325 per tonne cfr Taiwan for HMS 1&2 (80:20) containerized scrap on August 10, down from $330-335 per tonne cfr Taiwan on June 29.

On August 10, Metal Bulletin's price assessment for HMS 1&2 (80:20) bulk scrap into Vietnam was $360-365 per tonne cfr, unchanged week on week.

Rebar export offers out of Turkey have followed suit, dropping from $545-560 per tonne fob on June 28 to $527-540 per tonne fob Turkey on August 9.

“If Turkish rebar offers drop further, Singapore buyers are likely to purchase more of [this] material,” a trader in Singapore said. 

Turkish rebar is typically offered in shipments of 40,000-50,000 tonnes and, as there are few buyers in Singapore able to accept such big cargoes, traders often bring a few buyers together to buy a single shipment.

End users in Singapore are hoping for bargains in the market as the steel tariffs against Turkey take effect from today.

“Prices may continue dropping as [Turkey's] rebar exports to the US could be completely cut off,” an end user in Singapore said. “Turkish mills will need to divert their rebar exports to other markets such as Singapore or Hong Kong.”

Turkish rebar has been undercutting China-origin rebar by at least $10 per tonne each week recently as domestic prices in China have been kept relatively high due to government-mandated production cuts amid steady demand.