Sentiment in Turkey’s hot rolled coil market has switched to a more positive mood, following the deals closed in the local market and moderate export sales. Significant support has come from the relaxed competition in the import HRC segment and firm import scrap prices.
Since the end of last week, Turkish mills have closed deals with most of the key HRC buyers in the local market. According to sources, re-rollers booked at least 10,000-15,000 mt each within $420-435/mt ex-works, while some of the large pipe-makers have managed to push for around $415/mt ex-works for lots of around 30,000 mt. Earlier the mills were insisting on $440-445/mt ex-works levels and deals were expected by sources at even lower than $420/mt ex-works as the mills were squeezed by slow export sales. However, the limited presence of the CIS mills in the import market in Turkey, the absence of offers from Asia and higher raw material prices have strengthened the positions of local HRC mills. “Everyone got scared that they would be left with no feedstock and MMK is out, NLMK’s volume is limited, and Japan, India, South Korea are not interested in selling to our region. So mills have received higher bids,” a trader told SteelOrbis. Currently, Turkish HRC prices are again back to $440/mt ex-works in their offers. The product is available for August-September deliveries.
Negotiations in the export segment have also been active, though traded volumes remain limited. According to sources, around 10,000-15,000 mt were traded to Spain at around $425/mt FOB, while a similar lot was sold to Bulgaria at $5/mt higher. Some opportunities may be opened in Egypt, where the manufacturing segment has received an exemption from the earlier imposed additional 10 percent import tax. A lot of inquiries are reportedly coming from China with Turkey offering around $470-480/mt CFR or around $430-435/mt FOB or slightly below. “Freights have increased by $7-12/mt for each destination. Today, China would book at around $450/mt CFR, which for Turkey would mean close to $410/mt FOB base. It is too low,” a trader said. Despite a certain improvement, sources still consider export activity to be insufficient and consider the lack of competition rather than lively demand to be the reason for Turkey’s firmer HRC pricing.
