Over the past week, 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 have continued their downward movement, decreasing by an average of $15/mt week on week to $580-610/mt ex-works. Although production costs of HRC are high since prices of import scrap and other raw materials are still strong, domestic HRC prices in Turkey are moving downwards due to weak demand. As a result, the gap between prices of domestic HRC and welded pipe in Turkey has narrowed. Consequently, weak demand for domestic welded pipe and ongoing declines in domestic HRC prices in Turkey are exerting increased pressure on welded pipe prices.
Since the the Turkish lira-US dollar exchange rate decreased below 5.50 recently and as the Turkish lira is expected to continue to strengthen in the coming days, Turkish buyers, whose inventories are currently at quite low levels, are adopting a wait-and-see stance as regards new bookings and will likely resume their purchases when the exchange rate stabilizes.