Turkish flat rolled market faces slow demand

This week price levels have remained unchanged while demand for flat rolled products is still low in the local Turkish market.
 
Following the price reduction by Erdemir, the Turkish domestic flat rolled market saw a softening in prices in recent weeks. However, this week the price levels remained more or less stable despite the weak demand levels. The US dollar/Turkish lira exchange rate increased throughout the week to reach 1.90 and traders are having difficulty particularly with sales in the domestic market. The Turkish Central Bank launched a foreign currency sales tender taking the US dollar rate down to 1.83 on average on Thursday; however, the exchange rate resumed its rising trend within the same day. The view in the market is that such moves will fail to stem the increase in the value of US dollar against the Turkish lira. The low demand levels in the flat rolled market and the strength of the US dollar are resulting in slower purchasing activity in the Turkish domestic market for flat rolled steel.
 
Erdemir is offering hot rolled coils for November orders at $720-730/mt ex-works, while the offer level for cold rolled coils is at $860-870/mt ex works. Price levels for Colakoglu's hot rolled coils are at $720/mt, while Tosyalı this week offered $720/mt for hot rolled coils and $840/mt for cold rolled coils. Erdemir's hot rolled coil price level for the export markets has remained unchanged over the past week at $720/mt FOB.
 
The spot market is generally at $740-755/mt ex-warehouse for hot rolled coils, while price levels for cold rolled coils are heard to be at $860-900/mt ex-warehouse.Market players expect a further softening in the coming weeks, considering the current weak state of domestic demand.
 
On the import side of Turkey's flat rolled market, even though they have dropped to a certain extent, import prices are observed to be above the domestic levels after the inclusion of import duty. Offer levels by Russian producers are expected to come in at around $680-700/mt CFR Turkey in a short while, while no offer has yet been officially made.