The current business week in the Turkish hot rolled coil (HRC) market has started with a rather surprising and sharp increase in prices from China, supported by the recently announced additional stimulus package, which is expected to stimulate domestic consumption in China. However, the announced price rise, right before the week-long holiday in China, has been quite steep, $50/mt for import HRC to Turkey over the past week. Although a majority of the market players do not take such an increase seriously and expect a decrease after the holidays, China’s current policy may give some support to domestic producers in the markets importing from China, such as Turkey.
The most recent HRC price indications for early November shipments from China to the Turkish market have been reported at $560-570/mt CFR for Q195 grade HRC of 3 mm and higher. A week ago, the levels stood at $510-520/mt CFR, which were already considered unworkable at the time, and so the current offers are certainly off the table for Turkish buyers. It is mostly believed that China’s offers will decrease after the long holiday, but will most probably remain at high levels, which may support market pricing if there is enough demand to absorb the increases. “China tends to get positive very rapidly, but then becomes pessimistic again very quickly. I guess after the holiday they will stick with a $20-30/mt price rise compared to last week, versus the $50/mt increase announced today,” a trader told SteelOrbis.
Given the positive situation in China and disregarding the still weak demand in the Turkish domestic market and the still slow sales to the EU, Turkish HRC producers have attempted to increase local prices for November-December deliveries. One mill has officially set its prices at $600-605/mt ex-works, while another has raised its prices to $590-595/mt ex-works, sources say. Last week, the levels mainly stood at $580-590/mt ex-works. “Sure, we are not talking about buyers reaching $570/mt now, but it seems $600/mt and above will be hard for mills to sell,” a source said.
