Hot rolled coil (HRC) prices in Turkey have been under pressure from a significant drop in ex-China offers, with the negative mood strengthening by the end of the week given the significant drop in iron ore and futures prices. In addition, demand, mainly in export markets, has remained rather dull, with bids falling below sellers’ expectations. The situation in the import scrap segment is currently uncertain and many believe that in the short run the workable prices are set to stabilize in a narrow range.
The week started with offers from China for Q195 HRC of 3 mm and higher for April shipments at $558-565/mt CFR, versus $572-577/mt CFR earlier. According to sources, a 15,000 mt sale was concluded at the end of last week at $565/mt CFR Iskenderun. By the end of the week, the market has seen a sharp drop in iron ore prices and declines in futures prices in China, which have worsened the negative mood. While the situation will gain clarity next week, the latest indications for HRC from China have settled closer to $555/mt CFR while a few bids have been reported at $550/mt CFR. Many believe traders are shorting the market, trying to catch some inquiries.
In the local market in Turkey, the realistic domestic offers are now at $660-680/mt ex-works, down from $665-690/mt ex-works earlier. According to sources, around 30,000-40,000 mt of HRC have been traded this week at around $650/mt ex-works and this level seems to be valid for large orders only. As for exports, the official offer levels are at $640-650/mt FOB levels, while many market players report $630-635/mt FOB may be acceptable for some sellers. Moreover, many expect to see $620/mt FOB for inquiries for sizeable tonnages shortly. However, the price idea of EU customers is closer to around $600/mt FOB.