Over the past week, producers in the local Turkish welded pipe market have continued to face weak demand and downward pricing pressure which results from the negative pressure on domestic hot rolled coil (HRC) prices in Turkey. It seems that the pessimistic outlook for the Turkish economy has continued after the annual inflation in Turkey for August was announced at the beginning of the current month at 17.9 percent, increasing by 2.3 percentage points as compared to July. Meanwhile, the Turkish Energy Market Regulatory Authority, which publishes electric power charges every three months, has announced electric power charges in September instead of October, raising them by 14.6-16.2 percent. Also, BOTAS has increased natural gas prices by 14 percent for the industrial sector. With electricity and natural gas prices being raised in September, following rises in wages in July, and since new price increases are expected in October, Turkish welded pipe producers’ production costs are moving upwards. Although the volatility of the Turkish lira against other currencies seems to have eased as compared to previous weeks, the mood in the market remains cautious and is characterized by uncertainty. As a result, Turkish welded pipe producers are unwilling to conclude long-term contracts and receive payments via the direct debiting system.
As for the prices in the local Turkish welded pipe market, where the outlook for the economic situation remains pessimistic and no significant recovery has been observed in terms of demand, Turkish producers’ offer range for ERW pipes and hollow sections with 2-4 mm wall thickness made from hot rolled coil (HRC) of S235 grade as per EN 10219 to their domestic market has remained unchanged week on week at $630-650/mt ex-works.