Turkish hot rolled coil (HRC) producers have been once again pushed to decrease their prices. Local and export demand has remained at very low levels, given the upcoming elections in Turkey, currency issues and the competition with Asia in the European market. In addition, against the backdrop of the weak import scrap segment, China’s return from its holiday with aggressive HRC offers has put pressure on Turkish mills and they could not avoid providing discounts.
By the end of the week, domestic HRC prices in Turkey have dropped by another $20/mt to $720-740/mt ex-works base for June production. However, buyers believe $710/mt ex-works levels could be possible for serious orders. As regards exports, the indications from Turkey are at $710-730/mt FOB for June shipments. According to sources, $680-690/mt FOB may be possible for large tonnages. However, even that level would not work in the EU due to the tough competition with Asian suppliers, particularly India.
In the import segment, China has returned from its holiday with lower price levels, thus making market sentiment even worse. A majority of Chinese sellers are in the market to trade for June shipments at $590-595/mt CFR for Q195 grade, while several mills are willing to trade at $580/mt CFR. Last week, the general offers for the same HRC grade from China stood at $610/mt CFR. Given the low offers from China, the other suppliers from Asia mainly prefer to stay away from the Turkish market, not being able to compete. Moreover, the achievable prices in the EU are better for them in terms of margins, even though the European market has been weakening lately. Other than that, one of the Russian mills has been in the market with offers at $620-630/mt CFR, which are not considered workable.
