Turkish domestic flats market maintains strength

Monday, 16 June 2008 14:38:04 (GMT+3)   |  
       

The last three to four days in the Turkish domestic flats market have mostly been characterized by strength, mainly due to the prevalent expectation in the market that prices will indicate further rises. After Russian steelmaker Severstal last week announced a level of $1,245/mt CFR for its hot rolled coil prices for Turkey for August shipment, other countries exporting HRC to Turkey are also expected gradually to issue their price announcements for Turkey. It seems certain that these mills will similarly announce price hikes. In this context, sales in the Turkish domestic flats market are seen to have gained momentum ahead of the full announcement of prices. Although many companies think that Turkish integrated steelmaker Erdemir - which generally announces its prices at the end of each month - will not wait till the end of June to announce its new prices, there is currently no certainty regarding the issue. However, the price gap between the Russian/Romanian coils and Erdemir production coils has narrowed down to a certain extent.

In the local Turkish market Erdemir production HRC of 2 mm thickness is currently finding buyers at the level of $1,210-1,220/mt excluding VAT; the producer's 2.5-12 mm thickness material is being sold for $1,190-1,200/mt excluding VAT, while its CRC of 0.4-0.6 mm thickness is going for $1,300-1,320/mt excluding VAT. Meanwhile, strong levels of purchasing activity are being registered overall in Turkey. As regards the prices for ex-Bulgaria and Ukraine coils in the Turkish domestic market, it is seen that HRC of 2 mm thickness is being sold for $1,180-1,200/mt excluding VAT; 2.5-12 mm thickness HRC is going for $1,170-1,180/mt excluding VAT, while CRC of 0.4-0.6 mm thickness is finding buyers at levels of $1,240-1,250/mt excluding VAT.

In the coming days, it is expected that the prices in the Turkish domestic flats market will soar slightly, in line with the producers' new price hikes. The prevalent expectation among market players is that the prices will continue to climb a little further and will then gain stability. In particular, as Europe will be on holiday during the month of August, this expectation seems plausible. However, the most important factor is that the Turkish domestic flats market has started to accept the new levels, after its amazed reaction to the rapidly climbing prices in the first half of 2008.


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