Over the past week, demand in the local Turkish welded pipe market has increased and trading activity has accelerated as some local producers have reduced their prices significantly. As a result, 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 the domestic market have decreased by $30/mt on the lower end and by $20/mt on the upper end as compared to the previous week to $630-680/mt ex-works. Accordingly, the gap between domestic prices of hot rolled coil (HRC) and welded pipe in Turkey has narrowed significantly.
As the international credit rating agency S&P Global Ratings (Standard & Poor's Ratings Services) lowered Turkey’s credit rating on May 1 and subsequently an unexpected rise was announced for Turkey’s inflation rate for April, the Turkish lira has depreciated sharply against the US dollar this week. The sharp depreciation of the Turkish lira and the lively political scene in Turkey resulting from the decision to hold a snap election on June 24 have negatively impacted the domestic welded pipe market. However, in order to take advantage of the decreases in producers' prices, Turkish buyers have accelerated their welded pipe bookings due to their low inventories.
According to market sources, market players expect that domestic welded pipe prices in Turkey will eventually indicate further decreases. However, prices are unlikely to continue their downtrend for now, as Turkish welded pipe offer prices to the export market have not been revised yet. As a result, Turkish welded pipe producers’ pricing policy for the coming period is still unclear.