Following the price increases by Turkish flat rolled producers, Russian mills have started to increase their offer levels to Turkey as well.
Last week we mentioned in our analysis that the price increases implemented by Turkish producers were likely to continue and we particularly emphasized the expectation for further increases in the market. In line with this expectation, Turkish producers have increased their prices further for August offers by about $20-25/mt in general. Stockists have followed suit and reflected this increase in their own prices. However, demand from the end-user side is still lacking. Manufacturers have not speeded up their buying activity either, and the increasing prices appear to be exerting a braking effect on the activity levels seen last week.
Early this week, Turkish producer Erdemir started to accept orders for August production. The mill is heard to have increased its price level by about $20-25/mt for new orders received. Hot rolled products are offered at $780-785/mt ex-works, base, while cold rolled coils of 1-1.5 mm thickness are offered at $910-920/mt ex-works, effective. The market has expected the mill to make a further price increase during the week.
Another Turkish producer Colakoglu Metalurji has not yet opened its sales, which are expected to be at $780/mt ex-works for hot rolled. Instead, the mill is heard to be mostly selling ready stock material for the moment.
In terms of import offers, Russian mills' price levels have now been announced. As of early this week, Severstal's offers have been heard at $745/mt CFR for June production. They did not quote any price level for cold rolled coils; however, they indicated that they would consider firm bids at around $880/mt CFR. Another Russian mill announced its price level for hot rolled coil at $745-750/mt CFR and at $885-890/mt CFR for cold rolled. MMK's price for hot rolled coils in the meantime is at $735/mt CFR. An overall increase of $30/mt is seen in Russian producers' offers, over last month.
Inventory replenishment continues in Turkey's flat rolled spot market. Local traders and stockists are seen to be the ones who are keeping up the activity levels in the market, as demand from end-users is still absent. Stockists have increased their list prices by about $10/mt this week. Generally, hot rolled steel products are offered at $775-795/mt ex-warehouse, while cold rolled coils are offered at $930-950/mt for 1-1.5 mm thickness.