In this week's Turkish domestic flat steel market, local traders' ex-warehouse prices have softened, while these traders, having low inventory levels, are reportedly conducting negotiations with domestic flat steel producers for sales prices for September production. Market insiders state that, if the gap between the price levels of flat steel producers and the price idea of traders and pipe manufacturers narrows, then an increase in transaction volumes may be observed in the coming period. Since there is little consensus that Turkish domestic flat steel prices have bottomed just yet and as traders are currently concluding sales of May and June production materials at prices effective for September production, thus below their supply costs, traders are willing to negotiate for lower prices for September production. Currently, the price idea of buyers is $15-20/mt below producers' prices.
Turkish steel producer
Erdemir is currently offering September production hot rolled coil (
HRC) to its domestic market at the base price level of $750-760/mt ex-works, while
HRC offers given by domestic producer
Çolakoğlu Metalürji are at $760-770/mt ex-works, for late August rolling. On the other hand,
MMK-Atakaş has begun
HRC production and its domestic offer level is heard to stand at $745/mt ex-works.
Since early this week flat steel spot prices have continued to soften. Accordingly, in this week's Turkish domestic spot market
HRC offers have been at $750-760/mt, while 1-1.5 mm cold rolled coil (
CRC) offers have been at $880-900/mt, with prices of thinner
CRC specifications at $930-960/mt, all ex-warehouse.
In the market, import flat steel offers have started to become clearer. Accordingly, Russian mill
Severstal is offering August production
HRC to
Turkey at the base price level of $740/mt CFR, while another Russian steelmaker is offering
HRC to the Turkish market at $730-740/mt CFR.
The performance of downstream industries has been slowing, with the exception of the automotive industry. In
Turkey, the ongoing strength of automobile sales keeps production levels high, leading also to stronger sales of auto steels. This is also observed in both producers' sales and spot market sales. On the other hand, the machinery industry is expected to revive by September, after remaining sluggish during the summer. Consequently, demand for steel plate and hot rolled coil, the main input materials for this industry, is also slowing down. Due to Ramadan, the summer holidays in Europe and planned maintenance works of automakers, the flat steel market in
Turkey is foreseen to witness slower activity in August.