Unexpected Plunge in Scrap Iron: Weak Global Demand Hits Market

Deepening signals of a cooling global demand and fluctuations in commodity markets have intensified pressure on local industrial raw materials, triggering a sharp correction in the scrap iron market.

Local Reflections of Global Cooling

The downward movement in international iron ore indices is directly reflected in domestic scrap prices. This weakness in demand has gripped not only the scrap sector but also the key determinants of construction costs.

■In the last three months, the price per ton of scrap iron in the domestic market lost 900 lira in value.

■Falling iron ore prices are pulling cost dynamics downward.

■Slowdown signals in the global economy are constraining industrial demand.

Cost Advantage Spreading to Construction Rebar

This decline in scrap prices has also fed into construction rebar (structural steel) prices, creating a marked reduction in input costs for the sector. However, when balanced with the stagnation on the demand side, this situation may not completely eliminate the pressure on profit margins.

Zeynep Kaya: While declines in basic commodity prices like scrap iron are a critical prerequisite for softening inflationary pressures, viewed from a consumer finance perspective, the stagnation in the construction sector remains concerning. The reduction in material costs may not immediately reflect on housing prices; however, this downward flexibility in construction costs in the long term should be evaluated as a decisive factor alongside inflation expectations in shaping housing loan interest rates.