Prices still on the way down in sluggish Turkish flat steel market

Price decreases have continued to be observed in the Turkish flat steel market. The sluggishness on the end-user side which has been evident for weeks is causing difficulties for sellers and helping to push prices down further. Currently, HRC prices in the domestic market are heard to be standing at the level of $590-610/mt.
 
Distributors in the local market who were interviewed by SteelOrbis said that demand remains weak and that most sellers want to melt down their inventories, which of course facilitates further price declines. Meanwhile, in the Bursa region of Turkey, the market is seen to be more active thanks to the support of the automotive sector. However, the same cannot be said to be true for the Turkish flat steel market in general.
 
One of the scenarios frequently mentioned at the current time is that the market will likely see continued sluggishness and more price declines during the summer, after which it may post a certain recovery in September. However, local traders' inventory levels are not high and so a supply problem may occur during the summer period; thus, in the event of increasing demand, prices could also start to recover in the summer. Another point of discussion is whether iron ore prices will increase in the coming period and how producers would respond to such possible increases. Market players are wondering how the Turkish domestic market will react if producers choose to cut production levels in the event of iron ore price increases.
 
On the import side, Ukrainian steelmaker Ilyich's prices have continued to decrease. As of this week Ilyich's HRC offers to the Turkish market have declined to the level of $530/mt FOB, while traders' offers for Ilyich production HRC varies in the range of $550-575/mt CFR. On the other hand, ArcelorMittal Romania has concluded a deal for HRC to Turkey at the level of $610-620/mt CFR.
 
The gap between local producers' prices and spot market prices no longer exists. Tosyali is offering hot rolled products at the base price level of $590/mt, while Colakoglu Metalurji's offers are at $610/mt. Erdemir has returned to the orders for HRC received from its local market at the price level of $610-620/mt FOB. In the spot market, it is still possible to hear offers lower than mills' asking prices. As of this week, in the local Turkish flats market hot rolled product (2 mm) and cold rolled product (1-1.5 mm) prices are standing at the levels of $590-610/mt and $720-730/mt respectively. However, as we mentioned above, mills may give offers at various levels and it is still possible to hear offers lower than the mills' asking prices.