Coated steel prices stabilize temporarily in Turkey, financial risks rise

Prices of coated flat steel in Turkey have stabilized this week, following weeks of steady upward movement. Demand has been lower than before mainly following the completion of restocking and also due to the negative financial situation in the country. The Turkish lira-US dollar exchange rate has continued to fluctuate and buyers have remained cautious, only purchasing to meet their urgent needs, while they have also received only minimum tonnages from producers' stocks. On the other hand, re-rollers have continued to produce to meet the orders which they had concluded in the previous months and their stock levels have started to increase.

Contrary to this negative situation, prices are expected to increase further soon. Hot rolled coil prices have hit $950/mt ex-works in some official offers for August production and the import scrap market outlook is positive for now. As a result, Turkish coated steel producers are planning to determine their new levels and it is very likely that higher offer prices will be seen in the coated steel market early next week.

"The currency fluctuations make everything very complicated. We are almost unable to do business because of financial risks. But the situation is completely different in terms of prices, because the HRC offers are still trending up. We have to follow them as usual but we are trying to keep increases at minimum levels because of the financial situation in the country. If buyers are not able to pay for their orders, it means doom for everyone. That is why everybody should look for tradeable levels in the market," a producer told SteelOrbis.

On the export side, demand has slowed down due to Easter holidays in the EU, but it is expected to recover after the holiday period. However, Covid-19 measures have not been relaxed and this situation affects demand negatively. Prices have also not changed for export offers in the past week.