Posted on 23 Jul 2019
Turkish hot rolled coil export activity subsided last week, as prices in major export destinations were yet to recover and the domestic market provided plentiful selling opportunities at higher prices, Kallanish hears from market sources.
Turkish HRC offers remained at $500-515/tonne fob levels, depending on the mill, with just one sale made to southern Europe, at around $490/t fob equivalent, for a relatively large tonnage. But European buyers are not entirely out of the market, and are making tentative enquiries for fourth-quarter deliveries, amid lukewarm expectations of a possible rebound in the European HRC market. These are largely due to Italian output cuts, now amplified by uncertainty over ArcelorMittal Italia's operations.
European HRC inventories are also quite low, which, coupled with Turkish exporters' ability to ship with the shortest-available lead times, is an indication that exports will rise tangibly once the summer lull ends. However, Egyptian and Indian suppliers continue to pose a challenge to Turkish exporters, as both markets are relatively weak. An influx of competitively-priced offers, albeit with longer lead times in India's case, is likely in the event of a European rebound, sources note.
The Southeast Asian market remains out of bounds for Turkish mills, as buyers in the region continue to insist on lower prices. This is resulting in limited sideways price movement despite higher offers having been introduced by both domestic and export sellers. HRC import prices in Vietnam remain in the $510-520/t cfr range, with buyers opting for lower-lead-times lots and rejecting domestic offers at $541/t delivered from a major producer, Kallanish hears.
With the domestic Turkish market at its liveliest in the past quarter, export sales are off the cards for the next week for Turkish producers, sources note. Enquiries from European buyers are likely to start coming in again towards mid-August, when October-loading material will be discussed, traders suggest.
