Turkey’s cold rolled coil (CRC) producers have found themselves under pressure this week, given the extremely low business activity in the local market and currently challenging situation regarding exports. As a result, producers have decreased their prices as compared to the early June levels. Moreover, additional discounts may be provided by those who are under pressure to sell.
The uncertain situation in the feedstock segment and low demand have resulted in an official price decrease of around $30-40/mt for Turkey’s CRC over the past two weeks. As regards exports, the offer range is at $1,400-1,430/mt FOB officially for August-September shipments. However, some deals to the EU were reported at $1,380/mt FOB around 10 days ago and most market players report that the current workable level for ex-Turkey CRC is in the range of $1,350-1,380/mt FOB for August-September shipments.
One of the reasons for such a decline in CRC export prices from Turkey is the unfortunate demand situation in the local market. Turkish buyers are reportedly sitting on sufficient stocks and are just observing the prices. Lead times are at 12-14 weeks now, versus 6-8 weeks seen earlier, and so they can afford to wait, producers say. In addition, a downward price expectation exists, while financial risks also exist. Currently, domestic official prices for CRC are at $1,400-1,450/mt ex-works with the upper end valid for August deliveries. “Domestic sales are dead. That is why the producers are under pressure as regards exports, and for the local market it does not matter which price they give,” a trader told SteelOrbis.
In the import segment, ex-CIS offers have been reported at $1,350-1,370/mt CFR for August shipments, with some interest seen at this level, most probably from industrial buyers.
