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Kallanish Kallanish

Knowledge matters Knowledge matters

August, 19th 2019

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MAY 12

Turkish HRC export price falls on relentless competition


The price reduction competition between Turkish, CIS and European hot rolled coil producers continued last week as they attempted to win Asian business, forcing prices still further down, Kallanish notes.

Two Turkish mills offered HRC for Vietnam at $530-533/tonne cfr, roughly in line with Russian material offer at $520/t cfr and European at $535-540/t cfr, with applicable quality normalisation. The Turkish HRC offer nets back to around $498-500/t fob, but no deal has been struck. Buyers are aware that supply exceeds demand considerably and are trying to use the competition to their advantage to buy at even lower prices.

The plethora of HRC offers from around the world to southeast Asia interrupted Turkish mills' and traders' plans to close some tonnages last week. This is despite the Turkish lira weakening against the US dollar and therefore affording slightly more flexibility in negotiations, as previously expected. The weaker lira means Turkish exporters are able to lower their offers more, the notion which is further emphasised by a $10/t scrap import price reduction on Friday. It has also made room for traders, although the sheer volume of available material is complicating the market as buyers bid around $10/t lower, one trader says.

Turkish mills continue to offer HRC to Italy and Spain at around €450/t ($495/t) cfr. Depending on the tonnage, this could net back to $470-480/t fob, a price equal and lower than CIS offers to other regions, traders note. "It is a strange market: you could say Turkish and CIS prices are the same, but they sell in different markets, [... with] Turkey covering Southern Europe primarily, and Russia and Ukraine - Middle East and Asia. Turkey and CIS do compete in Asia, but so do Europe, Brazil, India: its a crowded market," one trader notes.