“Flat rolled market expected to continue firm level”

Mesut Ozdol, General Manager of Erdemir Sales and Marketing, expressed his views regarding the “Flat Rolled Market” in “SteelOrbis Turkish Steel Markets 2006 Conference” held in Istanbul on May 26. According to Mr. Ozdol, panic orders placed in the fourth quarter of 2004 caused high stock levels in US and Europe in the first quarter of 2005. A fairly good first quarter was seen in China as buyers placed new orders after the announcement of Baosteel second quarter 2005 price increases. Later on, new measures introduced by Chinese government increased the expectations of price falls in China. In 2006, Chinese producers cut production in December-February period due to the decline in prices. China's exports recorded a significant increase due to the overseas price differentials. The price gap between China and the US was $200/mt. But now, Chinese hot rolled coil prices increased from $350/mt to $500/mt and this situation may cause a decline in Chinese exports. On the other hand, the 19 percent increase in iron ore prices started to reflect to the hot rolled coil prices. Although there isn't any clear expectation about the flat rolled market, firm market conditions are projected to continue till the end of the year. On the Turkish front, flat rolled market recorded a 7.8 percent increase in consumption during the last ten years. The consumption increase of hot rolled coils indicated a stable level, by rising 8.4 percent. The highest increase was recorded in galvanized materials with 17.1 percent. Cold rolled coils increased %4.2 while plate rose 8 percent. Turkish flat rolled demand is expected to exceed 15.3 million tons by 2011.