Sustainability of coated steel price rebound in Turkey so far questionable

Import scrap prices have rebounded sharply in Turkey, triggering a significant increase in local hot rolled coil (HRC) offer prices. Higher feedstock levels have resulted in a $10-30/mt hike in coated steel prices in the country; however, there are some serious doubts whether the higher level will be accepted by the market. “We see a serious problem here. Scrap prices have increased and HRC prices have followed the trend and we had to follow too because HRC is our raw material. But nobody considers the demand. Big end-users are still closed and stocks are still high in the market. There is a big economic chaos in the world due to Covid-19 and we are not sure the current prices in the Turkish market can be sustainable. When an increase is not supported by demand, it cannot be sustainable. We have seen this many times in the past,” a reroller told SteelOrbis.

Local coated steel buyers are therefore not in a rush to restock as they have no clear picture regarding the prospects for end-user demand. “It is too early to say anything about it now. First, we have to wait and see the end-users’ demand. After they reopen and we have a clearer picture of their consumption volumes, we will see the real price levels in the market,” a trader said. As a result, many market players doubt whether the rebound in coated prices is sustainable and do not exclude a certain rollback in prices, SteelOrbis understands.

On the export side, prices have increased in line with local offers, but problems in terms of shipments have continued due to the current Covid-19 restrictions. This week, European countries have started to announce their exit strategies for the current restrictions and most market players expect to see a better picture as regards business opportunities shortly.