Turkish producers of flats are having hard times. Last week local buyers, who had been buying carefully for a long time, filled stocks with enough material from Europe amid devaluation of the euro and considering the absence of import duty, and have taken a wait-and-see mode. At the same time, local suppliers are unable to sell the material in export markets either because their prices are unworkable in their traditional target outlets (Italy and Spain).
Nevertheless, market players have different opinions on further market outlook. Some of them expect local mills to cut prices for HR products in order to attract domestic buyers. Others believe the chance to stir customers with lower offers has been missed, so suppliers will have to fix quotations. However, they will grant discounts of some $10-15/t while selling large lots of the material. Some market players believe if domestic demand does not improve within next two or three weeks, local producers will have to turn to export markets and to cut export quotations of HRC at least by $50/t (in case the euro/dollar exchange rate stays at the current level, which is EUR 1 = $1.37).
Mills’ domestic prices stand at $740-750/t EXW/FOB/FOT (excl. 18% VAT), although Erdemir, who has begun to offer November rolling of flats already, is still quoting the material by $10/t higher than the general price range. Market players say producers are ready to cut prices by $5-15/t when closing deals. Stockists’ prices for Erdemir’s material have dropped by $5/t and are now by up to $20/t higher than offers from the mill, so domestic quotations have remained unchanged so far.
Offers of CR products from Erdemir have been stable for more than a month now while deals have been made at the bottom of the price range. Stockists’ prices for the material are still by up to $10/t higher.
Foreign buyers, including those from Italy and Spain, to whom Turkish material was unattractive in the past, have absolutely lost their interest in it due to euro devaluation. As a result, nominal export quotations remain at $740-745/t FOB.
As for imports, customers have bought mainly HRC from Romania’s ArcelorMittal Galati at $730/t C&F, whereas initial prices were at $735-740/t C&F (up $10/t in a month). Besides, Hungary’s ISD Dunaferr has reportedly sold 10,000 t of HR flats (extra production) to Turkey at $685/t C&F (EUR 500/t C&F).
As for the material from the CIS, HRC from Russia’s Severstal are still available at $760-765/t C&F, which is by $5-20/t higher than mills' domestic prices in Turkey (excl. import duty). The material from Ukraine’s Ilyich is available at $710/t C&F (traders’ offer), like two weeks ago, but buyers are hardly interested in it in the current market environment.
( Source: www.metalexpert-group.com )