Posted on 16 Jul 2019
Turkish hot rolled coil export sales lacked momentum again last week, with only one regular considerable-tonnage sale made to Italy at around $505/tonne (€448/t) cfr by a typically lower-priced producer, Kallanish hears from market sources.
The seasonal lull in the European market has been further dampened by a lack of clarity on changes to the region's hot rolled coil import quota, now expected in October. This is preventing major negotiations from taking place, with uncertainty spreading among buyers, sources say.
Resultant bid indications are too low for Turkish mills, whose costs are constrained by the relative strength of feedstocks prices and enforced capacity utilisation cuts. These very reasons are also preventing further flung sales to the Middle East, North Africa and Southeast Asia, where demand and price increases have been lacking momentum of late.
Competition from the Russian ex-Baltic producer in Europe is also strong, as this producer was able to further reduce prices two weeks ago to secure sales. Last week it was offering at around €425/t ($480/t) fob St. Petersburg, slightly up on the week prior but still below Turkish mills' threshold of around $490/t fob. This is preventing Turkish mills from selling to some regions, traders note.
Amid ongoing uncertainty the Turkish HRC market mood remains sombre. This was emphasised further by mills' failure to increase domestic prices and sales volumes last week, despite anticipations of fourth-quarter restocking. Traders cite weak demand and high competition in the export and domestic markets as Turkish mills’ main concerns. These could possibly lead to even lower booking
