Posted on 29 Apr 2019
Turkish exporters of hot rolled coils have been facing lower bids from traders and direct buyers. Some mills are succumbing to the trend and selling at much lower than the original offer prices, Kallanish hears from sources.
Despite keeping their indications at $510-520/tonne fob last week, one Turkish producer sold a considerable volume to southern Europe and an equivalent of around $500/t fob, for June loading. The lot may be load-ready earlier however, Kallanish learns. Southern Europe remains the only destination where Turkish exporters are able to conclude business. North Africa remains increasingly out of the market leaning either towards lower-priced CIS material, which they target with $485-490/t fob bids, or staying out of the market.
The difference in buyers’ and sellers' price expectations have left Turkish HRC export market in a lull. Producers are unable to rely on traders as margins are already tightly squeezed, leaving little manoeuvre for traders’ own margins. Besides, CIS suppliers are both willing and able to reduce prices enough to win any business in the export markets which they now share with Turkey. As such a major Russian supplier continues to reduce pipe-making grade HRC for Vietnam, indicating $525/t cfr for June loading material, pricing out Turkish suppliers.
But quality difference is still pivotal, with some traders relying on Turkish mills to slightly adjust their offers down and sell large lots of higher quality re-rolling material to Asian buyers in May. This is because alternative supply from China is too highly-priced, and CIS suppliers are unable to satisfy quality requirements, they say.
