The Turkish flats market has this week been characterized by considerable sluggishness. Also, the national industrial production figures announced this week reflect the difficult period being experienced by Turkish industry in general. According to the Turkish Statistical Institute (TUIK), the country's industrial output fell by 17.6 percent year on year in December, the highest drop since records began in 1986.
Although demand in the Turkish flats market may see a revival in the upcoming months, it is likely that the period of revival in question will be weak and short-lived. Although a lot of companies will likely wish to do business and prices will increase, it is expected that such tendencies will not last long. Due to the sluggishness seen in the last two weeks, flats prices have fallen down by an average of $20-40/mt in this period in the Turkish market. Erdemir is offering new production HRC to the local market at the price level of $470/mt ex-works excluding VAT, with a three percent discount effective for cash payments. As a result of this price level, it is observed that the sales market share of Erdemir and Isdemir production material has recently increased to 60-70 percent from the previous 40 percent.
Although a lot of importing companies in Turkey in general have purchased their materials from Ukraine, Bulgaria or Russia, these companies have preferred Erdemir production material in recent times. Prices of products from Romania and Egypt are also gaining in competitiveness and such material is growing in strength in the market; it is known that there have been some deals from these two countries in January and February. The flats import markets became somewhat quieter after these deals. For March production, ex-Ukraine HRC offers are currently at $400-435/mt CFR Turkey, whereas Russian origin HRC offers are at $440/mt CFR Turkey. Besides, the latest flats deals from Egypt are at $460/mt CFR Turkey. Ex-Egypt HRC export offers are currently at price levels of $490-500/mt FOB.
Ukrainian flats producer Ilyich's commercial plates are currently being offered to Turkey at the price level of $580/mt CFR, whereas the same producer's shipbuilding plates are being offered to the same country at $605/mt CFR. Meanwhile, commercial plates from another Ukrainian producer, DMZ, are being offered to Turkey at the price level of $460/mt CFR. All offers are for February/March shipment. On the other hand, ex-Italy plate offers to Turkey are also being heard at around the price level of €600/mt ($773/mt) CFR Turkey for new production, and also at base price levels of €490-500/mt ($632-645/mt) CFR Turkey. In general, it is observed that Turkey's thirteen percent import duty for material coming from non-EU countries has been negatively affecting import demand for CIS origin plates. Another factor is the tightening in the shipbuilding, machinery and construction steel sectors.
Meanwhile, HDG prices in the Turkish market have this week softened, with 0.5 mm 100gr/m² HDG prices declining to the level of $735/mt ex-works excluding VAT, from $770/mt previously. This week's price level may vary depending on payment terms and/or length of deferment. The most recent offers given by the Slovakian producer U.S. Steel Kosice to Turkey for over-rolling HDG have this week declined to $600/mt CFR from the previous level of $650/mt CFR. Besides, the same producer's second quality HDG offers are at $550/mt CFR. While Erdemir production 2 mm HRC is being sold at $480/mt excluding VAT, its CRC is being sold at $520-540/mt excluding VAT. The low price gap between HRC and CRC, which has been observed in Turkey over the past month, has been continuing. It is known that some importers (that have been buying Romanian origin material) have announced price levels of $460-490/mt CFR excluding VAT for 2 mm HRC, with the price range in question depending on region and demand.