The month of April has been a month with two different phases for the flats markets. In the first half of the month in question, sluggishness was observed in both the global flats market and in the Turkish domestic flats market. Meanwhile, in the second half of the month, a tremendous uptrend was registered in the markets, almost as if these were under the influence of a magic spell.
Let's try to have a look at what lies beyond this magic spell. In the first half of April, everything seemed fairly normal.
- Billet prices increased by $25/mt ($925-950/mt: up 2.7 percent)
- Rebar prices moved up by $25/mt ($975-1,000/mt: up 2.5 percent)
- Scrap prices climbed by $65/mt ($660-665/mt: up 10.8 percent)
However, when we have a look at the second half of April, we observed an almost miraculous period for the markets:
- Billet prices soared by $200/mt in the last two weeks. ($950-1,150/mt: up 21 percent)
- Rebar prices climbed by $200/mt in the last two weeks. ($1,000-1,200/mt: up 20 percent)
- Scrap prices increased by $60/mt in the last two weeks. ($665-725/mt: up nine percent)
On the other hand, some issues on the agenda of the global market in April have played an important role in the iron and steel market and may result in significant developments.
- Reduction of import duty in India to nil.
- Reduction of import duty in Iran from 10 percent to four percent.
- The issue of Ukrainian exports to the EU without a quota.
Given the taxation changes in question, the creation of new markets for the CIS producers would mean that they will be able to export their materials to the markets they used to have difficulty in accessing in the past. Taking into consideration that the CIS domestic markets are also very strong, it would not be wrong to say that they will from now on gain relief in the export markets.
In the light of all these factors, let's have a look at Turkish integrated steelmaker Erdemir's price movements in the Turkish domestic market and make an estimation concerning the import materials, the prices of which are expected to be announced in the upcoming weeks.
30.04.2008 | 28.03.2008 | Change | |
CR annealed | $1,235/mt | $1,115/mt | 10.76 percent |
HR KRKK,LR,LRKK | $1.200/mt | $1,095/mt | 9.59 percent |
Even when looked at from a simple mathematical point of view, the changes in the prices during April may give an idea regarding the future outcome in the flats market.
In April,
- Scrap prices increased by 20.8 percent
- Rebar prices rose by 23 percent,
- Billet prices were up by 24.3 percent,
- HRC prices rose by 10.76 percent,
- CRC prices climbed by 9.59 percent.
All in all, an increase of approximately 22.5 has been registered in the prices for the non-flats sectors. The uptrend in question has seen a response from flats materials with an increase of 10.1 percent. Taking into consideration that flats products react more slowly to global changes, it may be said that an increase of ten percent might be seen in flats prices, which would narrow the gap with longs.