Latest situation in Turkish import flat steel markets

The flat steel price levels of foreign producers for Turkey have been revealed this week as we enter the month of Ramadan. While Russian origin HRC offers to Turkey have increased by an average of $30-40/mt, CRC offer prices from Russia to Turkey have risen by $15-70/mt. Quotations in (limited tonnage) offers to Turkey for CRC and galvanized materials have been at low levels, and some producers have only offered HRC. HRC and CRC offers given to Turkey in the current month for September production and October shipment are as follows:

It is heard in the market that Ukrainian flat steel producer Ilyich is trying to revise the price levels of previously concluded deals and is mentioning indicative prices of $520/mt FOB for HRC and $535/mt FOB for plates; however, no official announcement has been made by this producer yet. On the other hand, another Ukrainian flat steel producer Zaporizhstal's HRC offer prices are at $540/mt FOB Black Sea while its CRC levels are at $610/mt FOB Black Sea, both for October shipments.

Meanwhile, Erdemir announced new price levels on August 6, increasing its HRC price by $50/mt to $550/mt and raising its CRC price by the same amount to $600/mt ex-works. At the same time, Isdemir has also sold September production HRC at $510/mt, while it has sold October production CRC at $575/mt and has completed its bookings for October production CRC.

Whereas HRC imports to Turkey in 2008 stood at around 4.5 million mt, the figure for January-June 2009 dropped to 1.3 million mt, according to TUIK (Turkish Statistical Institute). This downtrend has been influenced by both rising import taxes and by the financial crisis. However, it should be remarked that the need for material in Turkey is increasing in line with the current improvement in the flat steel consuming sectors in general.

The previous uptrend in prices from China's flat steel producers has undergone a reversal in the past week. Having previously increased their prices up to $600/mt FOB, Chinese producers and traders has decreased their offers to lower levels as of this week. Since stocks have increased and demand has decreased in their local markets, China's producers and traders may turn their attention to exports again and may re-enter the Far Eastern markets, where the Russian and Ukrainian flat steel producers in particular have been selling material. Thus, developments in the near future in China should be monitored very closely. At the same time, given that Europe will soon make a full return from its holidays and given the purchase activity in this region before the holidays (at that time a post-holiday price uptrend was expected in the region), in the very near future we will see whether the European producers will increase their prices as anticipated.