Import offers from China in Turkey’s hot rolled coil (HRC) market have been somewhat vague lately, following the talk in the market about the China’s government warning about non-VAT export trade. While many believe the issue will not affect HRC shipments much at least in the short run, others expect prices from China to be rather firm in the coming days or several weeks, which is foreseen to support the general pricing in Turkey.
According to several sellers and buyers in Turkey, prices for ex-China Q195 HRC of 3 mm and higher have settled at $580-585/mt CFR, with some voicing prices as high as $590/mt CFR for mixed grade lots, while mills’ FOB price levels are lagging behind at $540-550/mt FOB. However, buyers believe the $575/mt CFR Turkey base level is possible still, in line with the end of last week, while before the holidays the prices stood at $555-560/mt CFR for HRC from China. Market sources estimate that up to 30-40 percent of HRC booked from China consisted of non-VAT trade and was at the lowest levels seen in the market. “The usual difference in prices was $10-15/mt between regular and non-VAT, so it is a direct loss of tax for the government. Even if it [non-VAT trade] stops, HRC will still be booked from China as they are the cheapest,” a Turkish source told SteelOrbis.
In the domestic HRC market, offers are back to $620-640/mt ex-works base for early June deliveries, while at the end of last week mills were trying to increase prices to $630-645/mt ex-works and above. The demand has not been supportive and many are now trying to understand the developments regarding Chinese HRC. Export HRC offers from Turkey have been mainly reported at $600-615/mt FOB levels depending on the order size, while a couple of deals, according to sources, have been closed within $590-600/mt FOB to Europe and North Africa.