Posted on 01 Dec 2020
Turkish hot rolled coil export prices continued to climb last week, with only March-rolling availability left and very few offers, amid increasing interest. Turkish HRC prices gained an astonishing $125/tonne during November alone.
Buyers are willing to pay much higher prices for earlier-than-March-loading dates, but sellers are unable to satisfy these requests, Kallanish learns. Offers to Italy were at around $650/t fob early last week for March-rolling material, but increased somewhat towards the end of the week. They were considered but not booked, although at $650/t fob they were workable, one trader says. This is based on expectations of further European price increases in December and in the first quarter
Despite these forecasts, buyers have become more cautious, while Turkish mills were also far from desperate to sell, supported by the ongoing demand boom in the domestic market. This dynamic is reflective of the sweeping pace of increases in both demand and prices during November. It was even more poignant as it followed many months of uncertainty, stagnation and failed starts.
European buyers are willing to take on the status of "importer of record" for Turkish material. This is despite the possibility of a retrospective anti-dumping duty from January, amid an ever-decreasing supply pool and the domination of domestic market makers. This demonstrates a real shortage of re-rolling material, which is expected to continue, traders say.
But demand and rising prices are not exclusive to the EU, with other regions also in the market and slowly shaking off the inertia of the last nine months. China continues to grow stronger in HRC pricing, along with Southeast Asia, while the Americas are following suit. The Middle East and Africa are also rising, and the pace of the increase is accelerating, despite there being no fresh bookings last week.
There may be a pause in bookings to catch up on lead times and spreads, as downstream cold rolled coil and galv prices are well ahead in the curve, traders note. There may be no price increases but a plateau, although some mills are eyeing $700/t as the next potential HRC level, taking into account low availability.
CRC was offered at anywhere from $800/t, with some bookings taking place in North Africa and Europe. HDG is confidently circling $900/t fob; however, being of March production, it was not attractive to buyers at this level.
Source:Kallanish
