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Kallanish Kallanish

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September, 29th 2020

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AUG 23
16:05

Turkish domestic HRC buyers size up their options

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Turkish domestic hot rolled coil market sentiment continues to soften, extending the pre-holiday quiet trend. Having restocked in late July/early August, Turkish HRC buyers were not seen making new purchases thus far, as global price softening continues, despite producers' attempts to jump-start a price rise, Kallanish hears from market sources.

Turkish mills are offering HRC in the domestic market at around $500-510/tonne ex-works, but indicate they are ready to negotiate discounts to firm bidders. Buyers, aware of the restrictive change to the European import quota for HRC, are expecting further price deterioration. They “…only apply to check on the price – they make no bookings yet," one local source notes.

The dynamic is frustrating mills, as their export sales have also dried up, unable to compete with ubiquitous Indian offers at lower prices. While ongoing price weakness in Europe is preventing Turkish mills' re-entry into that market. The frustration is further emphasised by a major Russian producer already offering its October-rolling material to Turkey at around $480-485/t cfr for small coils. The only factor preventing sales is its long lead times spanning to end November/December, sources note.

Buyers want shorter lead times cargoes, such as October and November, amid poor market visibility. Considering some European mills still appear to have September rolling material, it is likely that Turkish buyers may opt for European material again, much to Turkish mills' chagrin, sources add.

"Turkish producers of HRC are still offering at much higher levels in the domestic market – they could be in more luck if they brought domestic prices in line with exports, to around $480-485/t ex-works," a Turkish trader notes.