MONTHLY TURKEY FLAT STEEL WRAP: Moderate demand forecast again for May; prices expected to fall
Demand for flat steel in Turkey will remain moderate through May, and prices are expected to fall due to weak end-user demand, market participants told Metal Bulletin.
“Demand is very, very low, and there is no sign of improvement. Summer is coming, and things will get worse, I’m afraid,” one market participant said on Friday May 4.
“Prices [have] started to fall [and] will fall [further] for July production. The market is... silent,” one trader said on April 27.
“I believe prices will fall to below $600 levels in summer because the economy is not [looking] promising. Demand will not increase, [so the] only way for prices to increase is strong export markets, but they are on holiday in the summer months,” one market participant said on April 20.
The country produced 3.043 million tonnes of slab in January-March, up by 6.81% year on year from 2.849 million tonnes, according to the Turkish Steel Producers Association (TÇÜD).
The Turkish ministry of economy has started an investigation into the impact of steel imports on the country’s domestic steelmaking industry, it said on April 27.
The products under investigation include flat, long and stainless steel, along with steel tube and pipe products. The probe will be finalized in nine months, but may be extended by another six months if required, the ministry said.
Most flat steel prices decreased in April on weak demand. Still, producers filled their order books for June production.
Metal Bulletin’s price assessment for Turkish domestic hot-rolled coil (HRC) was $620-625 per tonne ex-works on April 27, compared with $650-675 per tonne ex-works on March 29.
Metal Bulletin’s price assessment for Turkish domestic cold-rolled coil (CRC) was $680-690 per tonne ex-works on April 27, down from $710-740 per tonne on March 29.
Turkish coated coil prices decreased in April, with demand in both the domestic and export markets slow because of price falls in HRC and CRC.
Metal Bulletin’s weekly price assessment for Turkish domestic 0.50mm hot-dipped galvanized coil (HDG) was $780-790 per tonne ex-works on April 27, falling from $790-890 per tonne ex-works March 29.
Similarly, the weekly price assessment for Turkish domestic 0.50mm-gauge pre-painted galvanized iron (PPGI), or color-coated coil, with 9002 color code, was $870-900 per tonne ex-works on April 27, versus $880-970 per tonne on the same comparison.
Metal Bulletin’s weekly price assessment for Turkish HDG exports was $780-790 per tonne fob on April 27, falling from $800-840 per tonne fob on March 29.
Meanwhile, demand for flat steel imports has not been strong, because prices have not been competitive, and end-user demand was already weak, sources told Metal Bulletin.
Metal Bulletin’s weekly price assessment for HRC imports in Turkey was $610-630 per tonne cfr on April 27, falling from $620-640 per tonne cfr on March 29.
And the weekly price assessment for Turkish CRC imports was $670-685 per tonne cfr on April 27, unchanged since March 29.
European demand for Turkish HRC was strong in April, but the safeguard investigation started by European Commission into 26 steel product types caused some buyers to refrain from booking.
Some European market participants expected Turkey’s flat steel exports to the EU to increase in the wake of the United States’ Section 232 tariffs.
About 10,000 tonnes of HRC was sold to Europe at $630-640 per tonne fob in mid-April.
And about 2,000-3,000 tonnes of HRC was sold to Europe at $620-625 per tonne fob in late April.
Metal Bulletin’s weekly price assessment for Turkish HRC exports was $620-625 per tonne fob on April 27, falling from $650-660 per tonne fob on March 29.
Turkey’s Tosyali is planning to invest in an integrated steel plant in Osmaniye, southern Turkey, chief executive Fuat Tosyali said in April.
The plant, fully owned by Tosyali Holding, will use local iron ore, and the investment will be completed in seven years’ time, with an investment of $7 billion. It will have crude steel production capacity of 2 million tonnes per year, and will replace imports currently by the company to produced flat steel.
New Turkish flat steel producer Yildiz Iron & Steel started PPGI production at its facility in Kocaeli in April.
The mill has capacity for 150,000 tonnes per year of PPGI and can produce PPGI in thicknesses of 0.25-1.20mm and in widths up to 1,300mm. The company will start producing 400,000 tpy of hot-dipped galvanized coil in June this year; production of cold-rolled coil at a rate of 1.5 million tpy will start in September.
Imports and exports
Turkey imported 1.87 million tonnes of flat steel in January-March 2018, down by 2.95% year on year from 1.93 million tonnes in January-March 2017, according to the Turkish Statistical Institute (TUIK).
Import volumes are expected to decrease further because of the investigation into the country’s steel imports.
Turkey exported 1.215 million tonnes of flat steel products in January-March 2018, up by 22.68% from the 990,172 tonnes exported in January-March 2017, TUIK said.