The general sentiment in Turkey’s HRC market is currently rather weak with demand being quiet in the domestic segment, while in the export market most buyers in Europe are refraining from active negotiations amid the uncertainty surrounding the quotas. While the official HRC offer levels from Turkish mills are nominally kept high and unchanged, the market expectation regarding workable price levels is $10-15/mt lower. Moreover, many foresee a decline in producers’ prices in an attempt to spur sales in the coming weeks. In addition, there has been some softening seen in the import scrap segment. In the meantime, the number of import offers is currently on the low side, mostly from China, while Egypt and Malaysia are expected to be back next week.
Currently, Turkish domestic HRC offers are at $630-650/mt ex-works from most of the mills. The levels of $655-660/mt ex-works are also voiced in the market but considered to be totally unworkable. Sources report that domestic demand is extremely low and the expectation is that the medium-size and large buyers will aim to book below $620/mt ex-works. As regards exports, most official offers are still reported at $630-635/mt and up to $640/mt FOB, but, according to sources, some suppliers may be ready to discuss $615-620/mt FOB levels. However, even these are not considered workable particularly in Europe. “I am sure that even if they [mills] give $600/mt FOB, it will still not work and, most probably, we will see $590/mt FOB within some time,” a producing source told SteelOrbis. Some market players, however, although sharing a downward expectation, believe that Turkey has some ground to avoid sizeable discounts. Currently, mills are offering August shipments and, according to some evaluations, they have sold 20-40 percent of allocations depending on the mill.
Import offers from China have been set this week at $560-565/mt CFR from the first-tier mills, and at $550-555/mt CFR from the second-tier ones, which is around $5/mt lower than before the holidays. Meanwhile, some traders have resumed non-VAT offers from China, indicating mainly $545/mt CFR but levels $5/mt lower, according to sources, are available in negotiations. According to sources, a couple of Turkish re-rollers have been in the market this week, with around $538-540/mt CFR considered workable.
Other suppliers of HRC to Turkey are not offering firmly and some of them may start negotiations next week. The expected indications from Malaysia are at $620-630/mt CFR, while Egypt’s indications are foreseen at $640-650/mt CFR, both for August shipments. However, Turkish buyers will most probably insist on price levels close to $610-615/mt CFR for duty-free origins.
Russia is also not firmly in the Turkish market - both sanctioned mills are currently focused on sales to Iran, where they can achieve $560-570/mt FOB levels for HRC. In the domestic market, the price levels are at around RUB 59,000/mt ($655/mt) ex-works for sheets. As a result, one of the mills in theory could agree to sell from the Baltic Sea at no lower than $500/mt FOB, which would be equal to $560/mt CFR. The non-sanctioned Russian HRC producer, according to market sources, will either not have any HRC allocation for export or will have a very limited one. Buyers assume the initial HRC offers from Russia for non-sanctioned HRC would stand at $585-590/mt CFR, but the assessed workable levels, according to buyers, would be at $570-575/mt CFR maximum.
