When we look at the general overview of all the markets, the overall price decrease trend for flat products continues to be seen. In particular, within the last week significant decreases have been observed. In Turkey, the list prices of Erdemir production flat products have not shown any changes, though it is heard that Erdemir production materials have been sold below the list price of $150-200/mt in the domestic market. It is also seen that domestic steel service centers have decreased their prices by $100-150/mt within the last two weeks. Consequently, the sales prices of mainly Ukranian origin 2 mm HRC have slipped to the range of $450-460/mt + VAT. In addition, lower prices may be found for purchases of large tonnages and for cash payments. Based on this general situation and on the supply-demand equilibrium, it might not be a surprise if Erdemir decides to apply a discount on its list prices at a minimum level of $150/mt. Surely, there is a possibility of reverse situation as we see before.
These price decreases do not provide a recovery seen in the demand levels in flats sector. However, the pessimistic picture should not be exaggerated. It is observed that flats sector has been shrinking by thirty to forty percent. Nowadays, the greatest problems are those of firms having difficulties in collecting payments and working on cash basis while realizing new sales. Firms are having difficulties in purchase materials on cash payment basis in a market where a shortage of liquidity is being observed. Therefore, it is a normal for a slight shrinkage to be seen in the trading volume. However, it is not incorrect to say that the price decreases seen in the past one month in particular have come to an end. When we look at the evidence supporting this statement - ore spot prices showing an increase, stock levels of flat products at low levels in general, many firms intending to buy due to the creation of confidence. The approaching religious holiday in Turkey and Christmas will likely cast a shadow on the trading volume. We will be better positioned to comment on the direction of the markets with the commencement of the New Year.
The effects of all interventions and production cut-backs aimed at overcoming the general stagnation will be seen within the coming two to three months. Indeed, it will not be a source of great surprise if the markets show a significant recovery with the commencement of spring. However, confidence needs to be built up in terms of finance and the market condition need to be created where people can feel free to spend money in order to achieve their goals. In addition, the Chinese government's elimination of the export tax as of December 1 will likely prevent prices from climbing rapidly, though there will be a recovery in the market.
Looking at the domestic sales prices of some flat products;
2 mm Erdemir production HRC | $530-550/mt + VAT |
2 mm Ukrainian origin HRC | $450-460/mt + VAT |
2 mm Romanian origin HRC | $490-520/mt + VAT |
25-50 mm Erdemir production plate | $830-850/mt + VAT |
60-100 mm Erdemir production plate | $870-890/mt + VAT |
25-50 mm Romanian origin plate | $800-820/mt + VAT |
60-100 mm Romanian origin plate | $850-880/mt + VAT |
0.7-1.5 mm Erdemir production CRC | $630-650/mt + VAT |
0.7-1.5 mm Romanian origin CRC | $600-620/mt + VAT |