Tough times are approaching for steel mills in Turkey, Ukraine and Russia

Scrap steel prices in Turkey, which buys almost 25 million tons a year and determines global trends, continue to slide down for more than a month amid political uncertainty that has led to a severe devaluation of the Turkish lira.

According to the latest information, several deals were carried out at the level of 345 - 350 dollars per tonne CFR Turkey from the USA. About 2 weeks ago the price was about $ 365 per ton, and a month ago it was about $ 385 per ton CFR. The Turkish lira has lost more than 20 percent of its strength compared to the prevailing rate of 1.75 12 months ago.

The weak national currency made imports of scrap steel rather expensive for Turkey. In addition, the situation is aggravated by the reduction in domestic demand for steel in this country and the lack of credit. The European Commission recently forecast Turkey to maintain growth of 2.5 percent this year, down 0.5 points from the previous forecast of 3.0 percent.

In addition, historically, scrap steel prices soften in April due to improved logistics after the winter months. With scrap prices being the first indicator of the health of finished steel prices, the path looks tough for steel makers.

Devaluation of currencies in Ukraine and Russia will also give an impetus for CIS factories to reduce prices. Rebar prices in the Middle East have already surpassed the normal threshold of $ 600 per tonne to $ 575 per tonne CFR. Thus, all factors point to a decline in steel prices in the short term.