The Turkish domestic hot rolled coil trade has resumed after over a week of no activity after mills with unsold May allocations lowered their offers. This was expected in the market last week, when one producer was offering to domestic buyers at $440/tonne ex-works for May production and $430/tonne ex-warehouse for material already in stock. Another producer reduced prices from $450/t exw to $430/t exw for May, but was offering to double the existing orders at $400/t exw.
A vertically-integrated mill has sold some material already this week at $415/t exw for a large May consignment to an industrial user, with smaller lots trading close to $420/t exw, Kallanish hears. Although $20/t down on its last week's offers, it is still higher than expected, and may be the bottom of the current price curve, as prices of scrap shot up considerably this week. With HMS 1/2 80:20 at $245/t cfr Turkey, $40/t up on last week, scrap-based cash cost of HRC production is reaching $425/t. As scrap rises, slab offers from the CIS are also expected to rise from $330/t cfr last week indicated by one mill to around $350-360/t cfr.
Domestic buyers anticipated new CIS HRC offers this week, but one Russian mill delayed its new Turkish campaign by another week, most likely on higher scrap, and is expected in the market next Monday. Another Russian mill sold 10,000 tonnes of HRC in large coils to a car manufacturer at $380/t cfr.
Restrictions due to the Covid-19 spread are still in place and are getting worse in some places. Sources note however that the raw materials price push is a weaker factor than it is traditionally. It may therefore cement the decision to reduce flat production in Turkey to some extent, if demand does not pick up in line with prices. This is a daily observation and decision-making process, sources note, and is impossible to forecast. But the halting of several Turkish auto and white goods making plants will affect HRC prices over the next several weeks, sources note.