Business activity in Turkey’s hot-rolled coil (HRC) market has been weak lately. The main buyers aim for lower prices for HRC from mills, taking into account that the sales prices for their own goods have been under increasing pressure from low demand. Local HRC producers, however, prefer to take their time for now to evaluate the market prospects and the situation with deliveries from China. However, in general, market players share the opinion that HRC prices in Turkey will decrease in the near future.
The domestic HRC prices in Turkey have stabilized this week at least in terms of the officially voiced levels. The majority of market players report prices at $1,200-1,250/mt ex-works for July deliveries, although some of the mills are voicing higher levels. “Trading is extremely low. There is no bid in the market,” a supplier said. “They [mills] are short of orders and we expect them to return with aggressive prices after the holiday,” a buyer told SteelOrbis. In the meantime, the business activity in the coated and pipe markets of Turkey has been decreasing, putting additional pressure on HRC offers in the country. Exports of HRC from Turkey have been extremely slow, taking into account that Turkey’s offers to the EU are much higher than those from competitors. While Asia is in the market to sell at €1,050-1,100/mt CFR, Turkey is offering minimum at around €1,190-1,200/mt CFR duty paid. On FOB basis, the offers are estimated at $1,200-1,250/mt FOB, with around $20/mt discounts considered as possible.
In the import HRC market in Turkey, the latest deals were closed for ex-Russia material for June shipments. According to sources, NLMK sold about 40,000-50,000 mt at around $1,000/mt CFR, which is considered a rather high price according to the current market conditions. First of all, the buyers consider business with Russia to be risky, although for now NLMK is one mill which is not much affected by international sanctions. Still, the financial, operational and reputational risks are quite high and a lot of Turkish buyers prefer not to touch this HRC of toxic origin. Particularly, some pipe-makers report they do not prefer not to buy from Russia due to the attitude of their customers from Europe. Another thing is that paying that price for Russian origin does not seem very reasonable, since there are competitive HRC offers from alternative suppliers. According to sources, ex-India HRC is on offer at around $1,010-1,030/mt CFR, although some players say these might be offers from traders who are going short. Ex-China offers have been reported at $940-960/mt CFR for Q195 quality and $1,020/mt CFR for SAE1006, down by around $20-30/mt over the past week.
