TURKEY FLAT STEEL WRAP: Prices stable, demand moderate as referendum approaches
Flat steel prices in Turkey changed only slightly in March, while demand was moderate. Most market participants now expect the market to remain cautious until mid-April.
A constitutional referendum will be held in Turkey on Sunday April 16, and market participants will probably prefer to wait until then before spending money.
Turkey’s total steel end-product consumption was 5.11 million tonnes in January-February 2017, a 7.70% decrease year-on-year.
The Turkish Steel Producers’ Assn (TÇÜD) attributed the decline to investment decisions being postponed by the production and construction sectors because of the referendum.
Flat steel prices were mostly stable during March, and Turkish mills were fully booked until June.
Hot rolled coil, cold rolled coil
Metal Bulletin’s weekly price assessment for Turkish domestic hot rolled coil (HRC) was $540-550 per tonne ex-works on March 31, the price range widening from $543-545 per tonne ex-works on March 3.
The weekly price assessment for Turkish domestic cold rolled coil (CRC) was $640-642 per tonne ex-works on March 31, narrowing downward from $640-650 per tonne ex-works on March 3.
“I do not expect any change before late April, after the referendum,” a trader said.
The coated coil market in Turkey also remained mostly stable and moderate in March.
Demand for exports of hot dipped galvanized coil (HDG), especially in Europe, was not as strong as it was in February, as prices from Indian suppliers were more competitive.
As the European Commission (EC) opened an anti-dumping case into imports of HDG from China on December 9, 2016, Turkish producers were able to find more buyers for their HDG in Europe in February.
“[Domestic] demand is weak [and] exports are also weak,” an executive with one producer told Metal Bulletin on March 24.”Vietnam is active in Europe, Russia [is selling] to the USA, [and] Turkish prices are not competitive.”
Local demand within Turkey was not very strong, and some producers in the country lowered their prices in March, in line with falling raw material prices.
The weekly price assessment for Turkish domestic HDG of 0.50mm gauge was $730-770 per tonne ex-works on March 31, widening from $750-751 per tonne ex-works on March 3.
The weekly price assessment for Turkish domestic pre-painted galvanized iron (PPGI), or colour-coated coil, of 0.50mm gauge, with 9002 colour code, was $810-830 per tonne ex-works on March 31, narrowing downward from $810-860 per tonne ex-works on March 3.
Turkey imported 565,175 tonnes of flat steel in February 2017, down by 20.82% from the corresponding month in 2016, when 713,821 tonnes arrived in the country, according to the Turkish Statistical Institute (TUIK).
The weekly price assessment for Turkish HRC imports was $500-515 per tonne cfr on March 31, up from $495-500 per tonne cfr on March 3.
The weekly price assessment for Turkish CRC imports was $575-580 per tonne cfr on March 31, unchanged since February 3.
“The market was very slow [last] week. Everyone wanted to see the next step from China,” a market participant said on March 31.
Demand for Turkish HRC weakened in Europe in March, as prices from Turkish mills were high and European buyers had lower bids.
HRC offers for export were $540-550 per tonne fob on March 31, but European buyers were bidding only $500-520 per tonne fob.
“Prices will decrease but, as Turkish mills are booked until June, they insist on high prices [now]. May will be slow due to holidays,” a trader said.
Turkey exported 312,247 tonnes of finished flat steel in February 2017, according to the TUIK.
This volume was 64.44% more than the 189,888 tonnes exported in February 2016, it added.
The total included 194,907 tonnes of HRC, up by 29.66% year-on-year from 150,316 tonnes in February 2016.
The main HRC export destinations were Spain with 59,768 tonnes; Italy, with 46,437 tonnes; and the UK, which took 17,507 tonnes.
The weekly price assessment for Turkish HRC exports was $520-540 per tonne fob on March 31, widening upward from $520-530 per tonne fob on March 3.
Rising export volumes and fluctuating prices will be the most important factors affecting the steel industry in 2017, Cem Üstün, ceo of Turkey’s Atakas Group, told Metal Bulletin in a recent interview.
He added that Turkish flat steel exports will keep increasing through the year.