The general sentiment in the hot-rolled coil (HRC) market in Turkey remains bullish, taking into account rather lively demand, which has allowed the mills to move on to sales for May deliveries and there are even offers for June. In addition, coated and cold-rolled steel prices have increased significantly over the past week, adding to the general mood in the market. However, the sufficiency of supply is still a concern for many buyers and some of them have activated imports, seeking to secure their needs. Therefore, material for closer lead times is preferred in the import segment, while most of Asia is offering for end-of-April shipments, which means in the best case end-of-May delivery. Egypt, which is not subject to import duty, has traded large volumes to Turkey since the end of last week. In addition, Russia is expected to succeed in concluding HRC sales to Turkey with a price increase from the middle of the month since the Russian mills are also able to deliver with short lead times.
The import HRC segment in Turkey has become more active since the end of last week. Specifically, Turkey has been seeking to purchase duty-free origins, namely, Egypt. According to sources, the Egyptian seller has traded at least 30,000 mt of HRC to traders at $770-780/mt FOB base for Turkey, to several customers, which would make around $790-800/mt CFR base with the estimated freight of around $20/mt for such a tonnage. “Part of this material is for high grade HRC since Egypt has a lower extra for this particular grade and also there is no tax,” a producer told SteelOrbis. Egyptian cargoes are for May shipments and, according to some sources, there have been offers voiced at $830-850/mt CFR effective, but the information has not been confirmed by the time of publication.
As for Asia, ex-China HRC remains the lowest available in the market - at $700/mt CFR for Q195 and $710-720/mt CFR for SAE1006, though no fresh deals have been reported. Taiwan is offering at around $750/mt CFR and India is at $780/mt CFR, both for April shipments. “If we consider 13 percent duty for China and around 30 days’ sailing time, that makes these levels not so attractive, which is why Turkey is pushing for discounts,” a trader told SteelOrbis.
According to sources, Russian suppliers are thinking of about around $750-800/mt CFR for April production depending on the mill and the level of sanctions, while earlier this month the price idea was closer to $730/mt CFR. “It is the closest lead time available for now. The cargoes can be shipped in April, so the price might be even higher,” a market source commented.
The official domestic HRC prices in Turkey have mainly remained at $850/mt ex-works for large buyers, mainly for May production or May-June deliveries. Some sources have reported deals at this level, while some customers reported they received $860-870/mt ex-works for small lots for May deliveries. The supply situation is still tight in Turkey given the uncertain situation at Isdemir, while some of the market players believe the mill will be mainly out of the HRC sales market within March. Therefore, the buyers in the region will continue to seek to restock elsewhere and some of bookings have already started. As for exports, Turkey is not so active, voicing the same $850/mt FOB levels for May-June shipments. Some traders believe $810-830/mt FOB levels might be also possible.
