A slight activity is being observed in the Turkish domestic flat products market with the beginning of spring just like whole world. According to picture occurred with the talks with lot service centers and local firms, companies are keeping their stocks at minimum levels and everybody has been purchasing only to satisfy their needs." According to the market players, two factors are essential for the end of the conditions above and for the firms to start to gather stocks again: First, the market should gain confidence and everybody should be sure that the prices have seen the bottom line. Second, markets should feel that the demand will rise and the markets should awake with that feeling. Thanks to the stimulus given by the government, some sectors in Turkey such as automotive and white goods have gained some relief and this situation has been helping the market players to feel high spirits.
Still, a question has to be asked: When exactly will the flats sector in Turkey gain confidence and start to stand up? Among several views, there are two main views are being observed: First, it is hard to see a real recovery in 2009 and the markets will be recovered in 2010 slowly. This view is so popular. Those who claim this view also say that there may be a second negative financial trend (less destructive compared to the first one) and it is not possible to see confidence until the last quarter of 2009 in the financial markets. Market players call this view "W trend" in general. It is also believed that a short optimist mood will be seen after the bottom line will be reached and a negative trend will be seen again after the optimistic period. As the latest bad news for the Turkish domestic flats markets, Turkey's monthly industrial production index decreased by 20.9 percent in March.
Meanwhile, the second view is so optimist as compared to the first one mentioned above. Thus, sector can react very fast to the improvements. This reaction has been observed in the last two years. Supply can be reduced very fast and the prices can move up and down also very fast and the market in general is able to see not only negative periods but recovery as well. The main reason behind this fact is the age of communication. News are spreading very fast among the markets. With fast news, reactions are being done at the same speed. In short, it is obvious that the markets will react positive against any positive developments or confidence. The growing number of market players are mentioning this point of view for the time being.
Looking at the last two weeks, oil prices have reached to $57/mt per barrel (while the supply has been reduced significantly), zinc prices are at $1,588/mt for cash payments and nickel prices have decreased to $13,030/mt. In the same time period, price levels of flat steel products have nearly stopped decreasing despite the fact that they have not registered increase under the influence of the sluggish demand. Some price increases, even slightly, may be seen thanks to the current positive mood in the market for the time being. However, no demand boosting is the subject. Thus, this so-called increase may not be too long. Great increases are so difficult to be seen in the short term. Still, if the positive mood continues after the summertime, a recovery (better than expected) may be seen.
As a result of these leading two views about the Turkish flats market in general, it is so important to monitor the market daily. Market players think that everybody has to be careful in steeping forward and should monitor the market with great attention. It should also be noted that no brave actions is being needed in such a period with great risk. However, it is certain that the morale among the market players is higher in general as compared to last month.