TURKEY FLAT STEEL WRAP: Producers enjoy strong export demand as local market stalls

Demand for flat steel in Turkey will remain moderate throughout August, but prices are not expected to fall because there is strong export demand, market participants told Metal Bulletin on Thursday August 2.

Local producers have filled their order books until the end of September, and are planning to increase their prices for October bookings, despite weak local demand.

Stock levels are not high in the Turkish local market, so buying should increase in August, sources believed. One week in August will be a holiday for the Eid al-Adha religious celebration, however, so bookings may be postponed until September.

Slab production
Turkey produced 6.19 million tonnes of slab in January-June 2018, up by 6.39% year-on-year from 5.82 million tonnes in the first half of 2017, according to the Turkish Steel Producers Association (TÇÜD).

Domestic prices
HRC, CRC
Most flat steel prices changed in July, which is seasonally a slow month for the Turkish steel market. But producers still managed to fill their order books for September output.

Metal Bulletin’s price assessment for Turkish domestic hot-rolled coil (HRC) was $625-630 per tonne ex-works on July 27, up from $615-625 per tonne ex-works on July 6.

The price assessment for Turkish domestic cold-rolled coil (CRC) was $680-690 per tonne ex-works on July 27, down from $700-710 per tonne on July 6.

Coated coil
Turkish coated coil prices decreased in July, with demand in both the domestic and export markets slow because of the summer lull.

August is expected to be strong in terms of exports, however, because demand for Turkish coated coil is increasing, notably in Europe after the European Commission decided to apply tariff rate quotas on imports of 23 steel products on July 18.

Metal Bulletin’s weekly price assessment for Turkish domestic 0.50mm hot-dipped galvanized coil (HDG) was $750-770 per tonne ex-works on July 27, falling from $770-785 per tonne ex-works July 6.

Similarly, the weekly price assessment for Turkish domestic 0.50mm-gauge pre-painted galvanized iron (PPGI), or color-coated coil, with 9002 color code, fell to $840-850 per tonne ex-works on July 27, versus $850-870 per tonne in the same comparison.

Metal Bulletin’s weekly price assessment for Turkish HDG exports was $750-755 per tonne fob on July 27, falling from $770-780 per tonne fob on July 6.

Import prices
Meanwhile, demand for flat steel imports has not been strong, because prices have not been competitive and end-user demand has remained weak, sources said.

Metal Bulletin’s weekly price assessment for HRC imports in Turkey was $585-590 per tonne cfr on July 27, narrowing downward from $585-595 per tonne cfr on July 6.

And the weekly price assessment for Turkish CRC imports was $645-651 per tonne cfr on July 27, rising from $640-645 per tonne cfr on July 6.

Russia sold CRC to Turkey at $651 per tonne cfr in July, while Ukraine sold the product at $645 per tonne cfr.

HRC exports

The European Commission set preliminary safeguard measures on imports of 23 steel products on July 18.

The provisional measures will take the form of a Tariff Rate Quota (TRQ) for each of the 23 categories of product included. Tariffs of 25% will only be imposed once volumes exceed the average of imports over the past three years.

As a result, local flat steel prices in Europe are expected to rise because domestic material will be preferred to cheaper products from East Asia due to the shorter lead times, European sources believe.

In addition, Europe imposes anti-dumping duties on imports from China, and from Russia, Ukraine, Brazil and Iran.

Turkey, however, sold more than 5,000 tonnes of HRC for export to Europe last week at $575-585 per tonne fob.

And deals to Europe were heard at $615-620 per tonne fob earlier in July.

New deals are expected to be heard in the market soon and later in the year because of Turkey’s advantage of short lead times for European buyers.

Metal Bulletin’s weekly price assessment for Turkish HRC exports was $575-585 per tonne fob on July 27, falling from $615-620 per tonne fob on July 6.

Investments
New Turkish flat steel producer Yildiz Iron & Steel started HDG production at its facility in Kocaeli in July.

The mill has capacity for 400,000 tonnes per year of HDG, and a temper mill with capacity for 450,000 tpy.

The HDG will be made in gauges of 0.20-3.00mm and in widths from 700mm to 1,300mm.

Yildiz started production of PPGI at Kocaeli in March 2018.

Imports, exports
Turkey imported 4,021,152 tonnes of flat steel in January-June 2018, up from 3,846,450 tonnes in the corresponding period in 2017, according to the Turkish Statistical Institute (TUIK).

Demand for flat steel is weak in the country’s domestic market, however, so import figures are not expected to increase in the coming months.

Turkey exported 2,582,199 tonnes of flat steel products in January-June 2018, up by 14.09% from the 2,263,297 tonnes exported in January-June 2017, TUIK said.

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