Despite clearly rising prices, the current situation and the short-term outlook in the Turkish hot-rolled coil (HRC) market remain unclear. The market players are trying to evaluate the consequences of the recent increase of the flat steel import duties in Turkey and the post-holiday uptrend in China, which turned out to be somewhat milder than expected. Overall, Turkish HRC prices, both domestic and export, have increased significantly over the week, while the situation in the import segment still lacks clarity. The most reasonable offers are coming from China, while some of the suppliers, who are focused on high-priced sales to the EU, are offering sky-high offers to Turkey.
Currently, local HRC prices in Turkey are at $780-790/mt ex-works for April production, up around $30-40/mt over the past week. The latest domestic deals were closed at $740/mt ex-works base, while some were reported at somewhat lower levels. The new export HRC levels are now evaluated at $750-770/mt FOB for April shipments, followed by rather significant sales to the EU and non-EU countries in the previous couple of weeks at $720-730/mt FOB, which SteelOrbis reported earlier.
In the import segment, ex-China offers have been mainly reported at $675-690/mt CFR for March shipments from traders, while mills’ indications are at $700/mt CFR minimum. Before the holiday, the latest indications were at $680-690/mt CFR. There have been many discussions regarding the new import duties set in Turkey at 15 percent for regular HRC and at 13 percent for alloyed material, which is China’s case. Most Turkish sources do not expect much change due to the inward processing regime, but some market players worry that HRC imports will be restricted due to slow coated and CRC exports and recently stricter license evaluations. In the meantime, there are rumours that there have been attempts to cancel ex-China cargoes earlier booked to Turkey at around $640-650/mt CFR.
Aside from China, one of the Russian mills has offered at around $700/mt CFR, up $10/mt over the week, while a non-sanctioned Russian mills is out of the market for now. The offers from India and Egypt are reported at the highest and definitely non-workable levels in Turkey - $785/mt and $790/mt CFR, respectively.
“I believe the market will settle next week. We will see more reasonable offers, we will see our export potential and we will see what the domestic workable HRC price is,” a large producer told SteelOrbis.