Turkish and European sections market outlook

The stagnancy of the Turkish domestic sections market has started to reveal itself more clearly, with the effects of the long-standing financing problems experienced in the market becoming evident. Prices of domestic sections have indicated a fall on TRY basis since the $/TRY exchange rate has almost bottomed out. Angle prices are at TRY 870-930/mt, flat bar prices are at TRY 880-930/mt, while NPU and NPI prices are in a range of TRY 920-930/mt. We previously mentioned that a wait-and-see stance was the prevalent strategy applied in the market due to the softening in scrap and billet prices. Furthermore, the cancellation of the Chinese VAT rebate has contributed to this situation. After the cancellation of the rebate, offers from China came to reflect a truer picture. Chinese producers' angle offers have increased, now ranging at $500-520/mt FOB. This increase in prices has not reduced the demand for sections. Turkish producers are giving July shipment offers for UPN and IPN and June shipment offers for angle, flat bar and square sections. Turkish mills are offering angles for export at $670/mt FOB for June shipments. However some producers are offering angles at $685/mt FOB. Export offers for UPN and IPN are at $685/mt FOB. The strong demand for sections is continuing in Europe's domestic markets. European customers are treading with greater caution as regards offers from Turkey. The Greek market, which started to stagnate before the Easter holiday, is still calm. The softening in scrap prices has caused customers in this region to stand aside and wait and see how the future market situation develops. Prices in the Greek market for angle are at €560-570/mt, prices in this market for 8 and 10 mm flat bars are at €590-600/mt, 3, 4 and 5 mm flat bars are in a range of €630-650/mt, while UPN prices are at €550-560/mt. Moreover, the Romanian market is currently active. Due to the robustness of the construction season, the movement in the European sections market is positive. On the other hand, the sections market is slow in Turkey. The softening in billet prices has not started to affect producers' offers yet; however, it may cause customers to prolong their wait-and-see approach.