Day: 13 April 2020

Turkish automotive production fell sharply in March, amid the COVID-19 outbreak which especially hit export demand, S&P Global Platts observed from the latest Turkish Automotive Manufacturers’ Association (OSD) data published Monday.

As most major Turkish automakers have paused their output as of the end of March, due to disruptions in procurement, sales and delivery related to the virus outbreak, Turkey’s auto output is expected to hit bottom in April.

According to the OSD, total automotive production in Turkey decreased by 22% on year in March to 103,350 units, as exports fell by 30% to 83,771 units.

Turkish automotive production in the first three months of 2020 totaled 341,136 units, down 6% from last year, while total export sales declined 14% to 276,348 units.

After falling to the lowest level of the last 16 years in 2019, automotive sales in Turkey showed a notable recovery in the first two months of this year, amid lower interest rates. However, as the COVID-19 outbreak negatively impacted demand, automobile sales in Turkey fell significantly in the last week of March, amid sharp exchange rate fluctuations.

The stoppages by major auto producers as well as some other industry sectors in Turkey have also notably pulled down the nation’s steel demand in general. Some Turkish steel producers have already announced output cuts, while some have paused their output.

— Cenk Can

Turkey’s largest steel pipe producer, Borusan Mannesmann, which paused output at some of its mills in Turkey as of April 3, following the stoppage at its Vobarno plant in Italy due to the coronavirus outbreak, has restarted output at its Turkish mills as of April 13, S&P Global Platts learned Monday.

“We have restarted output at our Halkali works in Istanbul and Gemlik spiral-welded pipe works in Bursa with minumum workers, with all necessary protection measures taken,” the company said Monday, adding that the stoppage at its Vobarno plant in Italy is extended till May 3 in line with the Italian government’s decision to stop production activites due to COVID-19 outbreak.

The company is continuing pipe production at its US mill, which is classified as a mill with strategic importance within the scope of the US law, with minimal workers in a rotating protocol that takes into account all the necessary precautions against the COVID-19 outbreak.

BM’s Turkish mill capacity is 750,000 mt/year of longitudinal welded pipe and 300,000 mt/year of spiral welded pipe. Capacity for cold-drawn special pipe at its Vobarno plant in Italy is 28,000 mt/year.

The company’s US electric-resistance welded pipe mill in Baytown, Texas, has a capacity of 300,000 mt/year.

— Cenk Can

The increase in Turkish mills’ rebar prices over the last ten days supported by higher scrap pricing and some Turkish mills’ stoppages seems to have eased recently amid slow demand, especially in export markets, amid ongoing uncertainties arising from COVID-19 outbreak.

After falling to a four-year low at $207/mt CFR on April 1, scrap prices showed a notable gain in the first ten days of April, as reported. S&P Global Platts assessed Turkish imports of premium heavy melting scrap 1/2 (80:20) at $251/mt CFR last Thursday.

Turkey’s scrap suppliers were still pushing for higher prices Monday – to as much as $260/mt CFR – amid availability issues, trade sources said.

Some Turkish mill stoppages due to adverse market conditions also created supply issues in some regions of Turkey, as most construction sites were still operating in Turkey.

Low export demand and cash flow problems arising from exchange rate fluctuations have begun to limit trade activites in the Turkish rebar market, but mills have started the week generally with flat prices on a dollar basis.

The Turkish lira lost another roughly 1% in value against the US dollar Monday amid expanding COVID-19 outbreak and started to trade in the range of Lira 6.78-6.79/$1 at 5 pm in Turkey.

Major Turkish long steel producer Icdas, based in the Marmara region, has been offering lira-denominated 12-32 mm rebar at Lira 3,320/mt ex-works Biga, including 18% value-added tax (VAT) Monday, which equated to $414/mt ex-works, excluding VAT, relatively flat week on week.

Bastug Metalurji, based in the Osmaniye region of southern Turkey, which closed its order book last Wednesday, reopened it Monday and started to offer 12-32 mm rebar at Lira 3,320/mt ex-works, the company informed Platts.

The company’s 10 mm and 8 mm domestic rebar list prices were at Lira 3,350/mt and Lira 3,380/mt, respectively.

Stockists’ 12-32 mm rebar offer prices to the domestic market remained in the range of Lira 3,260-3,280/mt ex-stock Monday, roughly flat week on week.

— Cenk Can

Following a silent period since mid-March amid an uncertain environment arising from the globally expanding COVID-19 outbreak, Turkish buyers, whose stocks fell to very low levels, have made some hot-rolled coil import bookings, especially from Russia last week, as import prices slumped, informed sources told S&P Global Platts Monday.

Turkish buyers booked around 100,000 mt of May rolling HRC particularly from the CIS region in the range of $385-$390/mt CFR over the last ten days, sources said.

Import offers from other suppliers were around $400-$405/mt CFR last week but didn’t attract any buying interest in Turkey, as domestic mills’ HRC offers for sizeable bookings to some major pipe makers fell as low as $410-$415/mt ex-works last week. Some mills’ export offers fell below $400/mt FOB.

Although the latest low-priced import bookings have put further pressure on Turkish mills’ HRC quotations amid low demand, Turkish mills have been generally offering HRC to the domestic market around at $430/mt ex-works and above this week, amid the notable rise seen in imported scrap prices, which reached as high as $250/mt CFR in Turkish mills’ latest bookings at the end of last week, amid some availability issues.

“There are even some attempts for $260/mt CFR for imported scrap this week,” a trade source told Platts Monday.

Cash flow problems arising from sharp exchange rate fluctuations have continued to limit trade activites in the Turkish market, as Turkish lira lost another roughly 1% in value against the US dollar on the first trading day of the week.

HRC imports reach 1.28 million mt in 3 months

Before the virus outbreak silenced demand in Turkey, Turkish HRC imports rose sharply year on year and hit roughly 1.28 within three months, according to the latest Turkish Statistical Institute (TUIK) data sent to S&P Global Platts.

After reaching as high as 450,000 mt in December and 444,000 mt in the first month of 2020, Turkish buyers’ imports of HRC reached as high as 387,000 mt in February, higher than the 332,000 mt imported in the same month the previous year.

Russia remained Turkey’s top HRC supplier in February at 130,000 mt, while imports from Ukraine totaled 93,200 mt in that month, around double year on year.

Turkey’s HRC imports from South Korea rose more than five-fold year on year to 36,800 mt in February, while imports from one of Turkey’s largest European HRC suppliers, France, totaled 33,500 mt in that month, up 73% year on year.

Other HRC suppliers to Turkey in February were; Brazil (24,700 mt), Japan (20,000 mt) Romania (18,500 mt) and Italy (11,000 mt), the latest TUIK data showed.

— Cenk Can