The process observed in the flat steel market, which started with Chinese producers and stockists of flats focusing their attention on exports due to decreased local demand, has continued with Chinese origin flats offers showing a decline with each passing week. Chinese mills and stockists, which have begun to give offers to Southeast Asian countries at levels quite below the offers given by Russian mills, have also started to give offers to the European, Middle Eastern and Turkish markets; the offers in question have led buyers in these markets to move with caution towards offers in general. Since offers given from China have continued to decrease in the period after China's National Day holiday (October 1-8), Russian and Ukrainian mills' offers have also deteriorated.
Russian and Ukrainian mills' offers given to Turkey for November production have indicated certain decreases as compared to last month. Severstal's price idea for November production is at $575/mt CFR Turkey for HRC and at $675/mt CFR Turkey for CRC. Meanwhile, NLMK has offered HRC at $565/mt CFR and CRC at $670/mt CFR. MMK has announced its HRC offers at the level of $550/mt CFR for November production. Russian mills have lowered their offers as compared to their offers for October production; however, they are acting with greater deliberation when decreasing their offers compared with Ukrainian mills.
On the other hand, Ukrainian flats mill Ilyich had firstly decreased its HRC offers from $500/mt FOB to $480/mt FOB; then last week it concluded bookings to several countries, to Turkey in particular, at the level of $460/mt FOB.
Meanwhile, HRC offers given from China to Turkey for 3 mm above thicknesses are in the range of $500-510/mt CFR. The number of bookings concluded by Turkish pipe producers from China has in recent weeks has shown an increase.
In Turkey, against the background of the decrease in import tax rates for flats and the deterioration of import offers, flats imports have increased even if demand is low. Flats import tax rates in Turkey are as follows:
January 1, 2009 |
Before September 18, 2009 |
After September 18, 2009 |
|
HR |
5% |
13% |
9% |
Re-rolling grade HRC |
3% |
5% |
5% |
CR |
6% |
14% |
10% |
Coating |
14% |
15% |
15% |
If we look at exports, according to data released by the Istanbul Mineral and Metals Exporters' Association (IMMIB), Turkey's flat iron and steel exports have shown a rise of 38.7 percent in the first six months of 2009. The leading recipient of Turkish HRC in the first six months of 2009 was Italy, followed by India and Romania. As regards CRC, the largest export tonnages in the period in question were delivered to Italy, The People's Republic of China and Brazil. Meanwhile, Romania has taken the first place as regards Turkey's exports of coated flat products, followed by Israel, Italy, Lebanon and Brazil.