Following a certain period of a relative price stabilization, the offers for ex-China hot-rolled coil (HRC) in Turkish market have dropped significantly, thus bringing down the moods among the players and putting pressure on the local mills. The key reason is the decline of the iron ore prices and a drop in the local flats market as well as in futures.
According to sources, the Chinese HRC offers in Turkey have lost around $20-25/mt since earlier this week to $560-568/mt CFR for Q195 grade for July shipments. Moreover, several trading sources reported there are indications at as low as $550/mt CFR, but for now such a level is considered to be more of a buyers’ price idea. Around two weeks ago, the latest deals for ex-China HRC in Turkey were closed at $575-585/mt CFR, but mostly at the lower end of the range.
In such a situation, Turkish HRC producers, while facing low demand in the local market and finding it very tough to export, are now under even more pressure. Some of the mills have lowered their domestic offers by $10/mt since earlier this week, to $670/mt ex-works. Others report $660/mt ex-works base is also available for the large lots and expect $10/mt lower levels to be viable shortly. Still, some of the producers remain officially at $680/mt ex-works. On exports, more and more sources report $650/mt FOB is there, while others consider $20-30/mt lower levels to be more logical under the current market conditions.
