In our previous Turkish flat steel analysis, we predicted that Russian and Ukrainian producers would attempt to increase their flat steel prices due to the rising trend of Chinese flat steel prices. While it had previously been expected that China would curb its steel output volume, China's crude steel production in October was 51.75 million mt compared to 50.71 million mt in September, according to World Steel Association data. In addition, Baosteel canceled its discounts for HRC and CRC products in China last week, while Anshan Steel also announced that it was increasing its flat steel prices by $45/mt. Given the price increases in China, very low price levels from China are now a thing of the past, and overseas market players are very cautious due to the high production rates and stock levels in China.
Meanwhile, CIS flat steel producers are trying to increase their prices for Turkey. Ukrainian flat steel producer Zaporizhstal has raised its price levels by $15-20/mt for December production compared to last month and has started to offer HRC at $505/mt FOB Black Sea and CRC at $610/mt FOB Black Sea. For Turkey, the same origin HRC offers are currently at $520/mt CFR, with CRC offers at $610-620/mt CFR. It is thought that this price uptrend has partly been triggered by increasing transportation costs for January and February, due to the winter season. Meanwhile, Russian flat steel producers' offers to Turkey are currently at $530-560/mt CFR Turkey. For instance, MMK's offers are at $530/mt CFR, while Severstal's offers are standing at $540/mt CFR for HRC. On the other hand, Russian producers' CRC offers to Turkey are at $630-660/mt CFR Turkey for the time being.
Although there has been no great change in demand levels in the local Turkish flat steel market, flat steel prices in some regions have increased by $10-20/mt due to the rise in prices from CIS countries. However, there are still some traders that sell at lower levels compared to the general list prices in the market. In the Marmara (Gebze) region, 2 mm HRC prices are at $600-610/mt and CRC prices are at $730-740/mt ex-warehouse; in the Iskenderun region 2 mm HRC prices are at $580/mt, while in the Eregli region 2 mm HRC prices are at $590/mt: all these prices are ex-warehouse.
On the other hand, it is heard that Erdemir has sold some ex-stock materials, especially 5 mm and above, both last week and this week in the Turkish market.
Market players are still very careful despite the uptrend in flat steel offer prices given from the CIS countries to Turkey, principally because demand still lacks strength.