General sentiment in Turkey’s hot rolled coil (HRC) market remains quite negative and many players anticipate a further downturn due to the lack of demand from domestic buyers and stalled export activity. In this situation, local HRC prices have softened a little over the past week, although mills are trying to resist giving more sizeable discounts. The situation in the import segment, where the number of offers is still limited, is also not helping to support Turkish prices: ex-China offers have rolled back again, following a short-lived rebound.
Currently, most mills are trying to hold on to $650/mt ex-works base offer levels in the domestic market, while $630-640/mt ex-works is reported to be available for large volumes. Last week, most offers stood at $650-660/mt ex-works. As regards exports, the sales situation is even more challenging. Official offers are at $600-615/mt FOB from Turkey, while most bids from North Africa are at $560-565/mt FOB, while the south of the EU is targeting levels not above $550-560/mt FOB. “If the sales situation becomes more critical, I think they [Turkish mills] will accept $570-580/mt FOB, but for large volumes only,” a source told SteelOrbis.
In the import segment, offers from China for Q195 HRC of 3 mm and higher has rolled back from $570-575/mt CFR earlier this week to $555-565/mt CFR from some key suppliers. Still, there seems to be no active interest from Turkey’s side. “If someone buys at $555/mt CFR, it means roughly $630/mt with 13 percent tax and it is achievable in the domestic market. Meanwhile, China is offering for December shipments already,” a trader pointed out. “Turkey’s inward processing regime traditionally allows importers to avoid paying import tax, but the issue is that the re-rollers have been experiencing weak export sales recently and are now trying to cover the licenses for their previous round of HRC purchases,” another source said.
Along with China, there are $590-595/mt CFR offers from South Korea for December shipments. Egypt, according to sources, is targeting $615-625/mt FOB base, with freight estimated at around $25-30/mt.
