Turkey’s end-users (pipe producers mainly) and traders are still hesitant about starting flats purchases, though being in need to replenish their stocks. This is attributed to unstable economic situation, as well as expectations of further decreases. In the export market (mainly in Italy and Spain) Turkish suppliers are also having difficulty selling the material amid devaluation of euro against the US dollar. As a result, local suppliers have cut both domestic and export quotations in an attempt to stimulate sales.
Market participants have different opinions as to further developments in the market. Some of them think buyers will start refilling their inventories in the second half of November (mainly for future sales), which will allow sellers to push prices up. Others do not expect customers to become more active until the end of the year.
Thus, local producers Erdemir and Colakoglu Metalurji have decreased domestic offers of HRC by $15-20/t in a week, to $660-670/t FOT/FOB and $650-660/t EXW, respectively. Domestic prices are given exclusive of 18% VAT. Erdemir, which has already started selling December material, is also offering large lots at $640/t FOT/FOB with immediate payment. MMK Metalurji and Tosyali Iron & Steel are still offering only finished steel produced in previous months. Thus, MMK Metalurji is reportedly having problems with the quality of flats under 2.5 mm, which will be solved as soon as by December. As a result, the mill is quoting HRC ex-warehouse by $20-60/t lower than other domestic suppliers. Tosyali Holding is using the entire output of the material for its own pipe production, keeping prices for flats produced in the previous months the highest in the domestic market.
Stockists are now offering HRC by $5-20/t higher than domestic plants.
Turkish exporters have decreased quotations of HRC to $650-665/t FOB, down $5-15/t w-o-w. Yet, Italian and Spanish consumers are still reluctant to buy against the backdrop of unstable exchange rate. Although offers of Turkish HRC have dropped in the dollar terms, in euro they are coming to Spain at the week-ago level – EUR 500-510/t at the exchange rate EUR 1 = $1.38 ($690-705/t) C&F.
In the import segment HRC from Ilyich are available from traders at the price unchanged from last week – $620-630/t C&F. Rumours are circulating in the market that suppliers may cut prices to $595/t C&F; yet, no contracts at this level have been reported so far. November HR flats from Severstal, which were available to Turkey a week ago at rather high prices of $660-665/t C&F, have already been booked out in the alternative markets.
( Source: www.metalexpert.group.com )