In Turkey, in particular last week, the activity observed in the longs market has been reflected in increased long product prices; on the other hand, the Turkish flats market has maintained its silence. Some CIS countries have continued to get orders for April output, while some others are expected to start to get orders for May production materials. Some CIS mills are filling their order books up to the end of April, almost certainly on the back of sales concluded from the CIS to China, Vietnam and India. This month HRC offers given from CIS countries to Turkey have stood around the range of $350-390/mt CFR, while CRC offers given from CIS countries to Turkey have stood at $415-480/mt CFR. At the beginning of April, we will hear new offers from CIS mills for May shipments. Import demand has been decreasing due to the import tax applied on flat products and the weak local demand in Turkey. Turkish stockists have also given offers to Erdemir. Meanwhile, Erdemir's May production HRC prices at the level of $420/mt ex-works have also led to decreased demand for imports. Recently, purchases have only been concluded to replenish diminishing stocks. Looking at the export markets, Erdemir opened a new tender on March 27 and collected counter bids for May output from trading firms till afternoon. Besides, it is expected that Erdemir's export offers will decline.
One issue, however, should not be overlooked. Market players have indicated that they are experiencing difficulties in compensating price reductions since integrated facilities have not been able to satisfy their current cost structures, and thus they intend to increase their prices anyhow.
As for the Turkish plate market, it cannot be said that there has been a recovery in demand levels. The main reason for this is the demand contraction seen in the plate consuming sectors. In the new production commercial grade plate offers given from Ukraine to Turkey, Donetskstal is offering at around the level of $435/mt CFR, Alchevsk is offering at approx. $520/mt CFR, while Ilyich's offers are at around $530/mt FOB. All offers are for shipments to be made in late April/early May. It is said that bookings may be concluded below these levels. However, in Turkey there is no demand for new production material, with ready-stock materials mostly being preferred instead. On the other hand, traders have been offering commercial grade and shipbuilding plate from stocks at the Black Sea ports, i.e. Mariupol, Odessa and Novorossisk, in the range of $390-430/mt FOB. Also, two weeks ago, there were offers from Bulgaria for commercial grade plate at the level of $500/mt CFR. Considering that those offers were given when the €/$ exchange rate was at around 1.25, it is now hard see the offers in question being given by the Bulgarian mills when the exchange rate is around 1.36. Meanwhile, plate offers are heard from Italy for ready-stock materials at the level of €450/mt CFR - including all extras.
Given the decrease in the Turkish excise duty for the automotive industry, capacity utilization rates in the automotive supplier industries have increased and consequently the market has shown some recovery. However, the duration of this recovery is a source of some speculation, since the excise duty reduction in Turkey will last only for three months. The trends in the flats markets are in line with demand in the consumer industries. Should a rebound be observed in the related industries, local demand in the Turkish flats market will show an improvement; otherwise, purchases will continue to be made only to replenish diminished stocks.