The Turkish steel scrap import market shrugged off a lira and equity selloff Tuesday, with mills exhibiting appetite for cargo despite wider macroeconomic uncertainty.
At 1640 London time the lira had fallen to an exchange rate of 3.03 to the dollar, revisiting levels seen as Friday's short-lived coup started getting airtime.
The loss of confidence in the currency and economy seemed to be linked to President Erdogan's widening crackdown on alleged coup participants. Around 9,000 police offers have been sacked as part of an investigation following the arrest of military personnel and judges, while teachers were also being targeted Tuesday, according to reports.
The European Union has already warned Erdogan that the reinstatement of the death penalty for alleged coup members would bring to an end talks over Turkey's accession to the European Union.
"[It] depends what Erdogan decides to do with the people he arrested ... But if he dares execute some, then he risks unleashing a wave of EU and US sanctions against Turkey," one US-based scrap market participant said.
Scrap demand from mills was still holding up, however, as they sought material for August shipment.
A European merchant on Friday sold 38,000 mt of heavy melting scrap I/II (80:20) at around $220.50-$221/mt CFR to a large Izmir-based electric arc furnace.
The 38,000 mt cargo was for August shipment and it was confirmed with the wider market.
The same merchant also reportedly sold another cargo before the failed putsch, but details could not be confirmed.
A Benelux-based merchant sold 30,000 mt of HMS I/II (75:25) at $218/mt CFR to an Egyptian steelmaker more recently.
It takes longer to unload vessels in Egypt compared with Turkey, so freight is around $3-$5/mt more expensive. Consequently, sources said the deal normalized to around $220/mt CFR Turkey on an 80:20 basis.
Indications of tradable value rose on the back of these deals.
One Iskenderun-based buyer said offers were around $225-$230/mt CFR and that $222-223/mt CFR was acceptable for mills.
A European trader said $222/mt CFR represented tradable value for premium 80:20, while a European merchant said $222-$224/mt would be achievable.
An American trader said $223/mt CFR would be achievable for premium 80:20, and US merchants were eyeing $230/mt CFR, sources said.
Based on these deals and indications, Platts assessed Turkish imports of premium deepsea HMS I/II (80:20) at $222/mt CFR Tuesday, up $2/mt compared with Monday's assessment.
