Turkish mills have once again retreated in their official HRC offers specifically for the domestic market, under some serious pressure from buyers for discounts amid softer ex-China prices, weak HRC exports, and poor sentiments in the import scrap segment. The EU’s CSQs for finished steel imports, finally disclosed this week, have become another significant factor, given that the quarterly HRC quota for Turkish mills has been cut by 60 percent to only 160,574 mt. This will of course have a negative impact on Turkish mills’ positions in the mid-term, but the whole situation has impacted the general mood in the Turkish market at present as well.
Currently, according to domestic sources, it is possible to achieve $605-615/mt ex-works base price levels for HRC from most Turkish mills, down from $615-625/mt ex-works earlier this week. HRC is available for deliveries at the end of August and in September. According to some market players, large buyers will aim now for $590/mt ex-works maximum, while some voice even $580-585/mt ex-works expectations. “Buyers are mostly furious because prices dropped sharply and most of them booked at higher levels,” a source told SteelOrbis. The latest deals for small and medium lots, to both re-rollers and stockists, have been reported at $620-650/mt ex-works in the past couple of weeks.
As for exports, Turkey is offering at $600-610/mt FOB in official offers, while $5-15/mt lower levels were already voiced at the end of last week. “Everyone needs to digest the quota and there is hardly anyone willing to actually talk of import business in Europe these days. Negotiations will restart for sure, but maybe next week and definitely for fourth quarter imports,” a source told SteelOrbis. In the meantime, some suppliers have reported price ideas from the European customers at $560-580/mt FOB. “On the one side, EU mills will increase the HRC [prices], that’s for sure. But it is on the paper. The real business will start only for September volumes and stocks now are quite high,” another source commented.
In the import segment, offers for Chinese HRC are mainly at $538-545/mt CFR for September shipments, slightly down from earlier this week. Still, some report that the realistic price is at $532-535/mt CFR at the lowest, while buyers would be willing to discuss anything not above $520/mt CFR, sources evaluate. Russia remains out of the market for the new round as well, while indications that are not firm have been reported from Egypt and Malaysia as well. Sources generally do not expect any immediate overflow of import HRC offers for the origins now deprived of the EU market or being significantly limited in their supplies there. “In order to sell excess volumes to Turkey, one has to be competitive against Chinese non-VAT, which is currently not feasible,” a trading source told SteelOrbis.
