TURKEY FLAT STEEL WRAP: Local demand weak; exports slow down seasonally
Demand for flat steel in Turkey is expected to remain slow throughout December, and export demand was not strong because of seasonal reasons, but prices are not expected to fall because they did so in November, market participants told Fastmarkets on Thursday December 6.
Local producers have filled their order books until late January, they said.
The price falls in November resulted in part from weak demand in the local market after the Turkish lira lost a significant amount of value during August, after US President Donald Trump doubled the Section 232 tariffs applied to US imports from Turkey, raising the duties to 20% for shipments of aluminium and 50% for steel.
The lira fell to a low of TRY100 to $15.25 on August 13, down from TRY100 to $20.38 on August 1, according to exchange-rate website Oanda.com.
Relations between the US and Turkey had worsened in early August because of the trial in Turkey of American Christian pastor Andrew Brunson over his alleged links with banned political factions. Brunson was released on October 12 and the lira has regained some value since then. It was trading at TRY100 to $18.66 on December 6.
Global flat steel prices also fell during November.
Fastmarkets MB’s China export hot-rolled coil index stood at $477.50 per tonne fob main ports on November 30, down from $531.17 per tonne fob on November 1.
Turkey produced 10,478,000 tonnes of slab in January-October, up by 7.06% year on year from 9,787,000 tonnes in the corresponding period in 2017, according to data from the Turkish Steel Producers Association (TÇÜD).
Most flat steel prices decreased in November because of weak domestic demand.
Fastmarkets MB’s price assessment for Turkish domestic hot-rolled coil was $520-525 per tonne ex-works on November 30, down from $530-540 per tonne ex-works on November 2.
The price assessment for Turkish domestic cold-rolled coil was $615-620 per tonne ex-works on November 30, down from $625-630 per tonne on November 2.
Turkish coated coil prices also went down slightly in November. Demand in the domestic market was weak, but improving in export markets.
Still, December was also expected to be weak in terms of exports, because of the upcoming Christmas and New Year holidays.
Fastmarkets MB’s weekly price assessment for Turkish domestic 0.50mm hot-dipped galvanized coil was $690-710 per tonne ex-works on November 30, widening downward from $700-710 per tonne ex-works on November 2.
Similarly, the weekly price assessment for Turkish domestic 0.50mm-gauge pre-painted galvanized iron (PPGI), or color-coated coil, with 9002 color code, widened downward to $760-780 per tonne ex-works on November 30, compared with $770-780 per tonne in the same comparison.
Fastmarkets MB’s weekly price assessment for Turkish HDG exports was $690-710 per tonne fob on November 30, narrowing down from $690-705 per tonne fob on November 2.
Turkish producers exported 0.50mm HDG at $690-710 per tonne fob in late November, mainly to European destinations, the largest import market for Turkish HDG material. Some export deals were made earlier in the month at $690-700 per tonne fob to North Africa.
In early November, some export deals were made at $705-710 per tonne fob to North Africa and $700-710 per tonne fob to Europe.
But demand for flat steel imports in Turkey remained weak, because prices have not been competitive and end-user demand has remained poor, sources said.
Fastmarkets MB’s weekly price assessment for HRC imports in Turkey was $490-495 per tonne cfr on November 30, falling from $510-520 per tonne cfr on November 2.
And the weekly price assessment for Turkish CRC imports was $560-580 per tonne cfr on November 30, falling from $620-625 per tonne cfr on November 2.
Demand for Turkish HRC, mainly in the country’s major export market in Europe, was weak during November because of the approaching year-end.
Fastmarkets MB’s weekly price assessment for Turkish HRC exports was $510-515 per tonne fob on November 30, down from $545-550 per tonne fob on November 2.
The World Trade Organization in late October ruled that Morocco’s anti-dumping duty on Turkish hot-rolled coil, imposed four years ago, violates the international regulator’s rules on anti-dumping.
Morocco subsequently filed an appeal against that ruling, the WTO said on November 23.
Morocco had imposed a permanent 11% anti-dumping duty on Turkish HRC in August 2014, which was challenged by Turkey in October 2016.
Turkey imported 507,580 tonnes of flat steel in October 2018, down 35.88% compared with 791,553 tonnes in October 2017, according to the Turkish Statistical Institute (TÜIK).
The decrease in imports was because of weak demand for flat steel in the country, especially in August and September, after the political and economic tensions between Turkey and the United States increased.Turkey exported 485,614 tonnes of flat steel products in October 2018, 77.08% more than the 274,230 tonnes exported in October 2017, according to TUIK.
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