Exchange rate fluctuations in Turkey influence stainless market

It would not be wrong to say that domestic stainless steel market of Turkey is currently stagnant. Among the reasons of the stagnation, the beginning of summer holiday for some of the mills in Europe, the non-stop climb of stainless steel prices since January, and the appreciation of Euro and Dollar against New Turkish Lira with the latest economic fluctuation, which caused to an incredible burden in terms of stainless steel costs, can be counted. As it is known, the raw material prices which have kept increasing since the beginning of this year, and especially the sharp upwards curve of the nickel price, the indicator for stainless steel, in London Metal Exchange, and the fire at Thyssen factory caused stainless steel prices to increase in Turkey by around 120 percent since the beginning of the year. The policies of Far Eastern mills, Chinese government's awaited decision regarding the reduction of export tax rebate rate, and the direction of major stainless steel producers' (Arcelor, ThyssenKrupp, Outokumpu, Acerinox, Yusco.....) policies shall be the determinants for the market. Besides, it is also known that the strong demand for stainless steel in domestic Chinese market keeps Chinese mills generally away from exports and they are focused on the domestic market. Even if they consider exports, then the US and other countries near to China come forward as the main export destinations. Nowadays, the market rumors point out that Yusco, one of the biggest stainless steelmakers in the Far East, would increase its prices by $30 per ton. In the Turkish market, prime quality 304 grade stainless steel sheets are at around Euro 3,000-3,200/ton, and 304 grade stock stainless steels are at around Euro 2,750-3,000/ton levels. 316 grade stainless steel sheets can be sold with the prices approximately Euro 1,600-1,700 higher than those mentioned afore. Regarding stainless pipes, 304 grade ex-Far East pipes find customers in $3.80-4.00/kg, and 306 grade pipes in $6.00-6.10/kg ranges. Italy origin 304 grade stainless pipes are transacted in $4.10-4.20/kg range in domestic Turkish market. All prices in question are the transaction prices in domestic Turkish market, but VAT is excluded. Considering the above listed development and the general opinion in the market, no softening is expected in the Turkish market nowadays, while the currently stagnant and little stainless sheet demand is expected to increase in the long term with growth in investments in line with it. Taking into account the reports saying that nickel prices would end this year with a slight decline, no sharp declines but slight volatilities are expected on stainless steel prices.