The Turkish flats market has continued to be stagnant during the current week. At the end of January, with the increase in import prices, the Turkish flats market picked up and saw greater activity, with many import transactions concluded in January overall. In February, however, demand has not been as high as expected. While import offers have increased, domestic market prices have generally remained at the same levels, despite seeing decreases from time to time.
The market is still waiting Erdemir, which has announced a $120 million profit for the fourth quarter of 2009, to announce its prices for April production. Erdemir is expected to issue its new prices next week and to start collecting orders for April production. Meanwhile, competition has been escalating in the domestic market with Tosyalı's entry into the market for flats production.
Favorable news is heard from the automotive sector, though flats traders' sales for the local market have remained slow in February. With the recovery in other sectors like white goods, machinery and heating at the approach of spring, the local market will be more active. According to the Turkish Automotive Manufacturers Association's (OSD) assessment for January 2010, domestic automotive production rose by 97 percent compared to the same month in 2009 and in the same period exports increased by 86.2 percent. These data for January have given the sector hope for 2010. It is thought that 2010 will be better than the period which includes 2009 and the last quarter of 2008. Production in the automotive sector, especially in commercial vehicles, is expected to increase in the second quarter of the year. According to the OSD data for January 2010, exports to the EU rose by approximately 17 percent and the EU countries' share in Turkey's automotive exports increased by around 10 percent.
In Turkey's import markets, import offers are expected to increase in March; however, whether buyers will prefer import products or Erdemir's production will be clarified after this producer's announcement of its prices for April production. This week, Ukrainian mill Ilyich's price levels have been clarified, with its price of hot rolled products standing at $545/mt FOB and its price of cold rolled standing at $635/mt FOB. Also, traders' offers to Turkey are expected to be at approximately $585/mt CFR.
In the local Turkish flats markets, hot rolled product (2 mm) and cold rolled product (1.0-1.5 mm) prices remain at the levels of $580-590/mt and $710-720/mt, respectively. Prices have not changes as compared to last week. However, it is possible to hear different prices from traders, due to their purchases of the same material at different base prices.