MONTHLY TURKEY FLAT STEEL WRAP: Demand to remain moderate in February, prices unlikely to increase
Demand for flat steel will remain moderate in Turkey in February and price increases are unlikely because raw material prices are falling and end-user demand is unremarkable, market participants told Metal Bulletin.
Metal Bulletin assessed the price of hot-rolled coil (HRC) at $630-635 per tonne ex-works on Friday February 2, down at the high end from $630-640 per tonne in the previous assessment but up from $620-630 at the start of the year.
“Prices for April production will soon be lower than for March sales [which were $620-630 per tonne ex-works],” an executive at a steel service center predicted on Friday February 2.
“The market will remain silent for at least one more month. Scrap prices are also decreasing so a price fall for flat steel is inevitable,” the executive added.
Although demand is weak, high prices globally are preventing price falls in Turkey, a trader said.
“Demand is not very strong but export markets are good. That is why producers do not reduce their prices,” another trader said.
But the country’s flat steel production is likely to increase further because buyers prefer local products to imports and while demand from export markets is strong.
Turkey produced 11,684,000 tonnes of slab in 2017, up by 15.15% on the 10,147,000 tonnes produced in 2016, according to the Turkish Steel Producers Assn (TÇÜD).
The country produced 12.9 million tonnes of flat steel end products in 2017, a year-on-year increase of 19.2%. Flat steel consumption was 17.7 million tonnes in 2017, up 7.5% year on year.
Price movements in steel and steel commodities in 2018 will not be sharp, according to Gökhan Demiruz, chairman of Turkey’s Flat Steel Importers, Exporters & Industrialists Association (Yisad).
There will be further changes in prices over the rest of the year but by no more than 20-25%, Demiruz said.
Ugur Dalbeler, the chief executive officer of Turkish steelmaker Çolakoglu Metalurji, expects flat steel demand to remain strong in Turkey in 2018 although he believes that prices will rise because raw material and slab prices are increasing.
But market participants in Turkey believe that producers have increased their prices for flat steel products too fast since November so they are not ready to accept any further sharp increases even if slab prices continue to rise.
Domestic HRC, CRC
Flat steel prices increased in January - demand was strong for most of the month and producers filled their order books for March production.
“Prices will keep increasing for April bookings but God knows what will happen for May because it is followed by June and July - holiday months [when] demand is not very strong,” one market participant said on January 12.
The weekly price assessment for Turkish domestic HRC was $630-635 per tonne ex-works on February 2, rising from $620-630 per tonne ex-works on January 5.
Metal Bulletin’s weekly price assessment for Turkish domestic cold-rolled coil (CRC) was $690-710 per tonne ex-works on February 2, up from $680-690 per tonne on January 5.
Turkish coated coil prices changed in January, with demand in local and export markets moderate.
Metal Bulletin’s weekly price assessment for Turkish domestic 0.50mm hot-dipped galvanized coil (HDG) was $785-790 per tonne ex-works on February 2, narrowing downward from $785-800 per tonne ex-works on January 5.
The weekly price assessment for Turkish domestic PPGI, or color-coated coil, of 0.50mm gauge with 9002 color code was $865-870 per tonne ex-works on February 2 compared with $855-880 per tonne on January 5.
Metal Bulletin launched a Turkey export HDG fob price assessment on December 8, 2017.
Metal Bulletin’s weekly price assessment for Turkey HDG exports was $780-785 per tonne fob on February 2, unchanged from January 5. The price reached $790-795 per tonne fob last month but then fell back to $780-785 per tonne fob on February 2.
Demand for HDG was strong in Europe and South America at the start of February, with European buyers bidding $780 per tonne fob for the product.
Demand for flat steel imports has not been strong been because prices have not been competitive.
Deals for more than 10,000 tonnes of HRC were made in January at $615-620 per tonne cfr from Russia.
Turkey has a 9% import duty for HRC imports. The country reduced the import duty on HRC for re-rollers to 3.5% from 5% previously on January 1.
The TÇÜD is worried that the country’s imports of rebar and HRC will increase because of cuts to import duties, it said on January 8.
The country also imposed new import duties on steel plate, CRC and tinplate on January 1, 2018.
Metal Bulletin’s weekly price assessment for HRC imports in Turkey was $590-600 per tonne cfr on February 2, up from $570-580 per tonne cfr on January 5.
And the weekly price assessment for Turkish CRC imports was $650-655 per tonne cfr on February 2, up from $625-630 per tonne cfr in the same comparison.
Demand for Turkish HRC was moderate in Europe in January but was improving at the start of February. Several deals for more than 10,000 tonnes were concluded at $610-625 per tonne fob Southern Europe during January.
At least 50,000 tonnes of material were sold to Italy and Spain at $620-630 per tonne fob at the start of February.
Metal bulletin’s weekly price assessment for Turkish HRC exports was $620-630 per tonne fob on February 2, up from $600-610 per tonne fob on January 5.