Positive trend prevails in Turkish flat rolled market

An upward trend has been observed in the Turkish hot rolled sheet market since last week. In recent times, a cloud of pessimism hung over the market, in particular after the serious price reductions announced by Russian steelmaker Severstal a few months ago. After the sharp decline in prices, the stockists that had supplies in hand delivered their goods to the market. Taking this situation into account, buyers in the local Turkish market - considering the possibility of a further decline in prices - have had to act cautiously in their purchases. However, there have been signs recently that this pessimism is slowly starting to disappear. While hot rolled coils ex-Ilyich mill of Ukraine were being offered at $460/mt CFR in Turkey in the last few weeks, an increase of $5-6 in offer levels has been seen this week. It is being said in the market that the fact that availability of import materials in the local Turkish market for December is tight will create an impression that prices have rebounded, causing prices to increase slightly. Prices may then increase further, when buyers who believe that the market has bottomed out begin to renew their purchases. There are also rumors in the market that the prices soon to be announced by the Russian and Ukrainian mills will either be higher than the prices announced last month or, at worst, will be at the same levels. The positive mood in the market is expected to continue for a while. Since prices bottomed out far earlier than expected during the last few months, there are some market players who think that the rise expected during February-March 2007 may emerge earlier. Of course, apart from this expectation, seasonal factors that may affect prices should also be taken into account. The problems regarding shipments in the CIS region is a factor that may force buyers to conclude their purchases before weather conditions get worse. The change in the supply-demand equilibrium may cause prices to increase slightly. On the other hand, if the hot rolled sheet supply from Russia to Turkey increases more than expected, the resulting excess supply will probably put pressure on prices, thus causing a delay in any price rebound.