The discounts for hot rolled coils (HRC) provided this week by Turkish mills and the expected further downturn to be seen after the holidays have been naturally putting pressure on Turkish hollow sections (HS) producers. As a result, most of them have provided small discounts for now, while large mills have decided to take a more aggressive approach. The demand for hollow sections generally remains subdued amid the low construction sector activity.
In the local market, offers for hollow sections from medium-sized suppliers are around $1,200- 1,250/mt ex-works, down $20/mt on the lower end over the past week. In the meantime, according to sources, the large mills have been much more aggressive this week. The lowest level heard in the market is $1,100/mt ex-works base for hollow sections from the HRC producing supplier, while earlier the offers were at $1,160/mt ex-works and above. “They have the cost advantage and literally can do whatever they need to collect the orders and to maintain their market share,” a trading source told SteelOrbis. Another large HS producer is said to be officially offering $1,140-1,150/mt ex-works, but the workable levels for large tonnages are considered to be at least $20/mt lower than that.
Although the general price expectation is downward for HRC and, therefore, for HS in Turkey after the holiday period, some local players have hopes for some stability. “Hollow section prices are falling due to the decrease in HRC prices, thus many orders have been postponed, but, with the holiday approaching, business activities will slow down and prices will remain at the same levels, so with this bit of stability we expect our orders to increase after the holiday,” a market source said.
On the export side, most of the official HS offers for June production have decreased by $20/mt over the past week to $1,200-1,250/mt FOB. Large producers, according to sources, continue offering at $1,200-1,220/mt FOB and lower levels are still available. "There is less demand from the European nations where we sell the most since consumers today only want to purchase goods at the lowest possible price, which results in a shortage or postponement of demand," a pipe producer said.