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.