Domestic and export prices for hollow sections (HS) have moved further down in Turkey this week, mainly because suppliers are under pressure from subdued demand and pessimistic expectations in the hot rolled coil (HRC) segment.
Currently, local HS prices from small and medium-sized producers have decreased by $20-30/mt over the past week to $1,220-1,250/mt ex-works, but some mills are still insisting on $1,270/mt ex-works, though this level is not considered workable. In the meantime, according to sources, large producers are reportedly offering $1,160-1,200/mt ex-works on theoretical weight basis. “Demand is not there because construction activity is very low now, so they decrease the prices to generate demand and also to push for lower HRC. But as of now we can say they are not at a loss due to the earlier cheaper HRC import bookings,” a market source told SteelOrbis. Some producers expect the market to recover slightly by mid-May, following the end of the holiday period, and they foresee better demand and a livelier pipe trade, specifically in the local market. Still, some producers are concerned regarding the lack of current enquiries. “The HRC price trend has caused a drop in demand, and prices are continuing to plummet. Because of the negative market situation for hollow sections, we are concerned that we will not be able to meet the June production target due to insufficient demand,” a producer said.
On the export side, most official HS offers for June production have been reported $1,250-1,270/mt FOB from small and medium-sized mills, which is more or less in line with most offers in the past week. Large producers, according to sources, are ready to sell at $1,200-1,220/mt FOB on actual weight basis and maybe even lower than that.
Hollow sections exports are reported to be slow, partly due to the holiday period in the EU, but also due to the negative price trend, seen in local European offers and in prices coming from China and India. In addition, some Turkish pipe-makers say they face competition with offers from alternative sellers in their targeted markets, particularly from China.