Turkish HRC factories stifle export sales

On Monday, the export market for hot rolled coil products in Turkey remained calm after a week of holidays in Bayram suspended the market. Market participants expected Turkish mills to show some signs, but the mills remained mostly on the fence. This was partly due to the lack of available tonnage over the next eight weeks, and partly due to subdued demand.

At the beginning of last week, HRC indicative bids were still at $ 520-530 per ton fob. With bids to Europe currently around € 470-475 /t CFR for large tonnes from Asia, and with similar delivery times to Turkey, Turkish mills would have to cut bids significantly in order to gain trade. Turkish HRC mills know that the impact of production cuts in Europe will be slow, if realized at all. Sources say that with summer maintenance periods approaching, domestic factories may wait before offering August and September products in hopes of catching a possible European uptrend.

Southeast Asia, another major importer of Turkey's HRC, is also unlikely to match the pricing idea amid lower-than-expected HRC prices and expectations for a turbulent summer. There is also competition from regional suppliers, suppliers from the CIS countries and India, with the latter becoming more prolific in exports as the Chinese market weakens.

Turkey's pre-holiday plans to increase prices by about $ 10 /t thus look less realistic, with a decline likely, traders say. “The current price level is simply not supported, let alone growing: weak demand, uncertainty in China and Europe. It may take a few weak weeks before the market recovers, ”sums up one trader.