Posted on 11 Jun 2019
Turkey’s hot rolled coil export market remained quiet on Monday after a week of Bayram festivities had placed the market on hold. Market participants were expecting Turkish mills to make some indications but mills remained mainly on the fence. This was partially due to the absence of available tonnages for the next eight weeks, and partially due to muted demand, market participants tell Kallanish.
Early last week indicative offers of HRC were still at $520-530/tonne fob. With offers into Europe now at around €470-475/t cfr for large tonnages from Asia, and with similar lead times to Turkey, Turkish mills would have to reduce offers considerably to gain trade. Turkish HRC mills are aware that the effects of European output cuts will be slow in implementation, if at all. With summer maintenance periods approaching, domestic mills may choose to wait before offering August and September output, sources say, in a hope to catch a possible European uptrend.
Southeast Asia, another large importer of Turkish HRC, is also looking increasingly unlikely to match the price idea, amid softer-than-expected HRC prices and expectations of a lacklustre summer. There is competition also from regional, CIS and Indian suppliers, with the latter becoming increasing prolific in exports, as the Chinese market softens.
Turkish pre-holiday plans to increase prices by around $10/t thus appear less realistic, with a decrease most likely, traders say. "There is simply no support for current price level, even less for an increase: weak demand, softening feedstock, uncertainty in China and Europe. There will be a few soft weeks before the market may rebound," one trader says, summarising sentiment.
