Turkish flat rolled market feels the CIS squeeze

The Russian steelmaker MMK's announcement last week of its new hot rolled coil price at a level of $700/mt CFR for shipments to Europe has contributed to the slowdown in activity in the European markets, especially in southern Europe. The new price level, which is $100/mt higher than last month's price, has caused other CIS producers to hike their prices in turn. However, the fact that the CIS producers' price levels for shipments to Turkey have not yet been clarified has resulted in a calming of activity in the Turkish market. Moreover, Russian steelmaker Severstal's failure to allocate any tonnage for Turkey this month has also contributed to this drop in market activity levels. Currently, Ukrainian steelmaker Ilyich production hot rolled coils are at a level of $595-600/mt CFR Turkey; however, there is still a problem about the availability of this product in the Turkish market. The sales prices of imported materials in Turkey have also increased this week. With an increase of $20/mt in the sales price of Ukrainian origin hot rolled coils in the Turkish market, the price of this material has reached a level of $650/mt + VAT. The general expectation in the Turkish market is that Erdemir will announce further price hikes. Erdemir's price for hot rolled coil, currently at $640/mt, puts pressure on the sales prices of imported materials in Turkey. The high price levels in foreign countries have caused a slowdown in trading activities in Turkey. Moreover, the fact that traders are not able to arrange their prices in line with the prices abroad creates a problem in terms of the replacement of sold materials with new ones. Flat rolled product prices are expected to keep their current levels in the short run. Moreover, the possible hike when Erdemir announces its prices may slightly accelerate trading activities in Turkey.