Overview of Turkish flats market

Russian steelmaker MMK is offering hot rolled coils at $630/mt CFR Turkey for February shipments. On the other hand, the producer is offering cold rolled coils at $680/mt CFR Turkey, also for February shipments. The new prices of the mill indicate a decline of $20/mt as compared to the prices which it announced last month.

Severstal, another Russian steelmaker, is offering hot rolled coils at $635/mt CFR Turkey for February shipments. On the other hand, the producer is offering cold rolled coils at $700/mt CFR Turkey, also for February shipments. Severstal's new prices indicate a decline of $30/mt for HR material, while its price for CR materials indicates a rise of $5/mt as compared to the prices announced by the producer last month.

Ukrainian steelmakers are expected to announce their new prices soon. Following the price reductions of the Russian mills, Ukrainian mills are also expected to lower their prices.

The liquidity problem in the Turkish local market is said to be likely to continue till the end of the year. The bankruptcies of a number of firms operating in the Turkish flats market seem to have negatively affected the market situation. Despite all these problems, it is difficult to say that market activity has stopped completely. Although there is some market activity going on, there is also a liquidity problem, as we mentioned before. There has been a decline in the prices of import materials this week; however, there has been an increase of $20/mt in the local prices of HDG.

We may hear of actual sales after the announcement of new prices by the Ukrainian mills. In the coming period, especially in the first quarter of 2008, prices are expected to increase both in the Turkish local market and in the international markets. The rising trends in raw material prices and freight rates provide support for the expectations in question.