The domestic and regular foreign hot rolled coil (HRC) suppliers to the Turkish market have experienced a worsening of the general market sentiment this week, taking into account rather aggressive offers from Asia. While Turkish buyers are not yet ready to accept China’s offers in view of the expected imposition of export tax, some volumes from India have already been booked.
According to sources, ex-India HRC for July-August shipments has been offered by both mills and traders at $1,080-1,095/mt CFR Turkey and some deals for 10,000-15,000 mt lots have been reported at $1,075-1,080/mt CFR. “Surely the level is very good as it is over $100/mt below the local price [in Turkey] and for closer shipment,” a trader told SteelOrbis. In the meantime, offers from China have been even more competitive, at $970/mt CFR, on condition that the buyer takes the risks of the to-be-announced export duty rate for HRC in China. “There are talks at these levels but I don’t think there will be a lot of bookings. First of all, China may decrease more. Second, today we think the duty will be around 10 percent, but what if it is 20 or more?” a source said. It is worth mentioning that some market players believe there might be increased interest in buying from China among Turkish buyers if the prices fall low enough to absorb whatever the expected duty is.
Aggressive offers and sales from India have certainly brought down the mood among the CIS-based HRC sellers. Ukraine’s Metinvest, which was targeting $1,120-1,130/mt CFR for July production earlier this week, has now dropped the target offer to $1,100/mt CFR for small coils. Russian mills, including the non-regular to the market OMK, have voiced $1,150-1,160/mt CFR but are expected to decrease levels shortly.
In the local market in Turkey, the sentiment among the mills who are in the market to sell for October production mainly, has also weakened. Market sources report less voiced indications at $1,200/mt ex-works and more at $1,150-1,180/mt ex-works, down by $10-20/mt over the past week. However, some buyers have reported that they received offers up to $1,220/mt ex-works from one of the mills, but those are hardly considered to be workable in the coming days.