The Turkish lira weakened sharply at the beginning of the week following the surprise decision by president Recep Tayyip Erdogan to sack central bank chief Naci Agbal and appoint a finance specialist, and former deputy leader of Erdogan’s own AKP political party, Sahap Kavcioglu, as governor.
The Turkish lira was trading at 7.914-7.933 lira to $1 at 4pm on Wednesday, according to the ‘live’ rate on Oanda.com, compared with the daily conversion rate of 7.260 lira to $1 on Friday.
After the sharp decrease in the country’s currency, trading in the Turkish steel markets came to a sudden halt at the start of the week, with buyers and sellers all withdrawing from the market until the currency fluctuation settles down.
Demand for long steel products in the export market was already limited before the currency crash, with no significant bookings heard since last week.
Turkish steel mills lowered their rebar export offers by $10 per tonne to $620-625 per tonne fob on an actual-weight basis, but could still not encourage buyers.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), export, fob main port Turkey, was $620-630 per tonne fob on Thursday, March 18, down from previous week’s $640-650 per tonne.
“The market is completely dead at the moment. Everybody is just watching where the dollar/lira rate goes. Buying scrap is not the priority now,” said a Turkish source.
As a result of the lack of trading activity, the daily scrap indices remained static on Wednesday, March 24.
Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, was calculated at $428.81 per tonne on Wednesday, unchanged day on day.
And the daily index for steel scrap, HMS 1&2 (80:20 mix), US origin, cfr Turkey, was also flat day on day on Wednesday at $438.17 per tonne, leaving the premium for US material over European scrap at $9.36 per tonne on March 24.
Turkish steel mills remained absent from the deep-sea scrap import market on Wednesday March 24, due to the slump in the value of the lira and weak steel demand, market participants told Fastmarkets.