The price hikes announced by Erdemir early this week eased the price pressure on imported flat products in the Turkish market. Following Erdemir's price increases, major sellers in the Turkish local market have also adjusted their prices.
The new prices to be announced by the CIS producers next week will be effective in the Turkish local market. This week, offers for Ukrainian steelmaker Ilyich production hot rolled coils are at $595-605/mt CFR Turkey. However, spot goods in the Turkish local market are being offered at prices starting from a level of $610/mt CFR Turkey. End-users are trying to lower the prices. The struggle between the buyers and sellers is expected to be resolved with the announcement next week of the CIS producers' new prices.
With regard to the southern Europe market, a slight drop in prices has been observed. There has been a slowdown in the buying activities of end-users as a result of the previous price rises. The issue which makes the end-users hesitant in concluding purchases is the question of whether the prices have actually started to decline or not. On this issue, we encounter two possible scenarios;
1) Prices have actually started decreasing;
As mentioned in the market and also in our previous analyses, demand in the CIS and also in the European market is still strong. Moreover, the fact that the US is due to commence purchases from the CIS will create additional demand.
2) Traders are seeking to convert inventories in hand into cash;
In this situation, the traders are looking to convert previously booked materials into cash by selling them in the rising market. Due to the sudden flow of goods to the market, there is an impression of a decline of sorts in prices. However, the decrease in prices is thought be a volatile one.
Turning back to the southern European market, we see that hot rolled coils have been offered to the Italian market at €525/mt FOT level. Italian steelmaker ILVA is offering hot rolled coils at €520/mt ex-works in the local Italian market. It is said in the market that prices may increase by one or two percent in the coming weeks.