The Turkish flat steel market observed a decrease in import duties on flat steel products upon entering the month of Ramadan. Prices had previously increased very strongly due to the lack of materials triggered by the far higher price levels of imports compared to Erdemir's materials. Thus, the desire of end-users to see reduced import duties for flat steel products has become a reality. Accordingly, the hot rolled duty rate decreased to nine percent from thirteen percent, the cold rolled rate fell to ten percent from fourteen percent, whereas the galvanized duty rate remained at fifteen percent. Market players say that the lack of change in the galvanized import duty rate is normal as import duty rates on this material were at fourteen percent before the first (previous) change made in the import rates in 2009, and also as new galvanizing plants have been established in Turkey and as local capacities are increasing.
Meanwhile, on September 10 Erdemir increased its HRC price levels from $590/mt to $620/mt, while raising its CRC prices from $700/mt to $730/mt. Additionally, Erdemir took the stable price levels for November shipments with this increase, whereas the company was previously reflecting the 75 percent of price increases announced before the delivery date. Isdemir, on the other hand, is selling HRC at the price level of $590/mt ex-works.
While CIS producers have in the past week increased their price levels for October production materials to Turkey compared to September levels, it is heard that deals have continued to be concluded at the September levels. These conclusions of deals have caused, as mentioned before in our analyses, CIS producers to turn their attention more towards their traditional markets such as Turkey, Europe and North Africa, rather than to the Far East and India. While the CIS producers have mentioned price levels of $585-595/mt CFR Turkey for HRC and $680-690/mt CFR Turkey for CRC, deals have reportedly been concluded at $570-580/mt CFR Turkey for HRC and at $660-680/mt CFR Turkey for CRC. In Ukraine, on the other hand, Zaporizhstal's October production offers are currently at $550/mt FOB Black Sea for HRC and at $650/mt FOB Black Sea for CRC, with prices increasing by $10/mt for HRC and $40/mt for CRC compared to September production levels. Ilyich is mentioning the price level of $530/mt FOB; however, traders are offering overrolling material from Ilyich at $530/mt CFR Turkey and are offering new production material from this mill at $540-550/mt CFR Turkey. On the other hand, ArcelorMittal Galati's offers for HRC are at $590-600/mt CFR Turkey.
It is thought that the decrease in import duties on flat steel products in Turkey will not have any effect on rerollers or pipe producers (those that produce for the export markets) because they were already purchasing material with ‘certificates of authorization for inward processing' and so were not affected by import duties. The decrease in question has created opportunities for buyers that purchase material for the local market to buy not only Erdemir and European materials but CIS production as well. However, due to the expectation of a price slackening in the local market and given the weak levels of demand, import transactions are scarce, apart from those carried out by pipe producers and rolling mills.
With regard to plate offers to Turkey, price levels have in the past week seen a slackening compared to the previous week, with Alchevsk's plate offers now at $550/mt CFR from the previous level of $570/mt CFR Turkey. Donetsk production plates are being offered by traders to Turkey at $520-530/mt CFR and Ilyich origin plates are being offered at $565/mt CFR Turkey. Demand for plates in Turkey remains quiet.