Business activity in the Turkish hot-rolled coil (HRC) market has somewhat cooled down this week, as most large buyers had already purchased sizable batches from China.
In the domestic market in Turkey, most producers are above $1,300/mt ex-works base in their official offers for July deliveries, but levels of $1,250-1,280/mt ex-works are considered achievable from some sellers for serious orders. Overall, local HRC prices have been relatively stable for a few weeks now, although most sources believe these levels are much higher than the actual workable prices. However, for now there is resistance from Turkish mills against providing discounts, even considering that HRC exports are also slow nowadays.
Ex-Turkey offers for the European market are mainly at $1,300/mt FOB and, even though in some cases discounts up to $30-40/mt are considered possible, the levels are still not competitive for buyers. In particular, HRC offers to the south of the EU from Turkey are at around €1,270-1,290/mt CFR, while Asian sellers are offering mostly at €1,180-1,200/mt CFR depending on the mill and even down to €1,150/mt CFR in some specific cases. As a result, current Turkish base prices for HRC are not really workable in the European market. However, it is worth mentioning that one of the Turkish mills, which does not normally export, is now offering thin gauge HRC for export at $1,400/mt FOB. “In this case, it is some sort of compensation for the narrow coil [960 mm] and the competition in the EU market for this material is not strong, and still it is used for pipe production,” a market source told SteelOrbis.
Trade in the HRC import segment in Turkey has also been somewhat slow this week. Ex-China Q195 grade HRC is mainly offered at $1,030-1,035/mt CFR, with around $20-25/mt extra for SS400 grade. Despite the still significantly lower offers compared to Turkey’s domestic prices, local buyers are now less interested in purchasing from China. One reason is that most of the large consumers have already restocked sufficiently, while another reason is that there are certain fears that the question of HRC export duty may arise in China again in June and July. “Today we receive offers from China for June shipments. No good volume is available for May,” a Turkish producer said.
Indian mills do not seem so active in the market in Turkey nowadays while offers have settled for now at $1,120/mt CFR for end-buyers, while traders believe it is possible to take positions at $1,100/mt CFR, all for June shipments. Similar levels are offered for the nearby market of Egypt, at $1,125/mt CFR from India.