In this week's Turkish domestic flat steel market, rumors of an upcoming economic crisis have increased fears. Early this week the US dollar sharply appreciated against the Turkish lira and local traders have focused on this issue. Worries over a possible further strengthening of the US dollar have slowed down flat steel bookings of end-users and traders. Along with already weak demand and the sluggishness caused by Ramadan, and now the anticipation of an economic crisis added on top of these factors, the activity in the Turkish domestic flat steel market has weakened further this week. Due to the strong fluctuation observed in the US dollar/Turkish lira exchange rate, traders have preferred to wait.
In the already slow spot markets, no significant price change has been seen. Although the variety of specifications is still poor for hot rolled coils (HRC), spot prices have remained at $760-780/mt ex-warehouse. The spot market for cold rolled coils (HRC) has witnessed better activity levels as compared to HRC. CRC of 1-1.5 mm thicknesses has been at $900-920/mt ex-warehouse. Thinner gauge cold rolled coil prices have been at $940-970/mt ex-warehouse.
As for producers, Erdemir continues to accept orders for its October production, with increased prices as compared to its offers for September production. Erdemir is now offering HRC to the domestic market at $760/mt and 1-1.5 mm CRC at $930/mt, both ex-works. It is also reported that Colakoglu Metalurji and MMK-Atakas are offering HRC to the local market at about $750/mt ex-works.
Flat steel import offers given to the Turkish market have increased as compared to last month. Russian steel producer Severstal is currently offering September production HRC to the Turkish market at $760/mt CFR and its offers for CRC are at $870/mt CFR, both for late October shipments. When import duty is added to these offer prices, it is said that they exceed Turkish buyers' price idea. Thus, with discounts reaching $10-20/mt, it is thought there may be some transactions. Last month, Russian steelmakers' HRC offers to Turkey were at $730-740/mt CFR, while their offers for CRC were at $840-850/mt CFR.
In the meantime, Ukrainian HRC offers to Turkey are currently standing at $715/mt CFR. However, given that the price level was at about $690-700/mt CFR in previous weeks' transactions, some price reductions are expected for these offers.
End-user sectors are expected to revive by early September. The Turkish automotive industry, where planned maintenance works are being conducted currently, is foreseen to resume activity by next month. In the meantime, the machinery, panel, radiator and home appliance sectors are predicted to strengthen by September or October.