Flat rolled markets outlook

Despite the slowdown in European demand due to approaching holiday and relatively less stronger demand in the US market compared to earlier months, hot and cold rolled steel prices are not expected to show a significant decline due to the strong domestic market in CIS countries. However, if the quota for CIS imports to the US and EU would fill up, besides local market, the switching direction of exports to Middle East and Turkey may cause prices to decrease. The expected slowdown in Turkish domestic market is considered to become clear with the Russian producers' price announcements in 28th week. However, low-level sales are heard in the market during this period. On the other hand, the concluded sales are not an indicator for the slowdown in the market. The concluded sales were due to both liquidity requirements of some traders and/or stockists and the activity in their stocks. For example; nowadays the local buyers have to fulfill their payment obligations to Erdemir for procurements made during January-February period with deferred payment terms. Therefore those local traders might have concluded some certain sales slightly under the prevailing market price in order to meet their urgent cash requirements. Apart from those doubts in Turkish market, a huge slowdown in international is in fact not a huge possibility according to several market players. Some local producers have even hiked their sales prices in the US, while the hikes in local sales prices in certain CIS countries still continue. On the galvanized material front, zinc prices have shown a slowdown towards the end of June compared to the beginning of the month; however, the prices gained momentum again at the end of June and reached $3,350-3,400/mt. The demand for steel plates in Chinese domestic market continues its strong trend. In addition to current capacity of shipyards in China, which is full till 2010, there are also new shipyard constructions. Panamax and Capesize types of vessels are being produced in these shipyards. The markets in Southeastern Asia are also quiet. In Taiwanese market, there are not many import and export activities and the sales or purchases in local markets remained neutral. The markets are also calm in Singapore and the Philippines. There are not many sales concluded for hot rolled material in Vietnam. Hot rolled strip and cold rolled strip imported from China are sold largely.