China pursuing smaller Turkish HRC buyers

London, 27 April (Argus) — Chinese traders are now seeking orders of any size from Turkish buyers as the sheer volume that they are selling to the market is allowing them to add multiple orders of a few hundred tonnes to vessels they have already fixed.

In the past, Chinese sellers would only go after large orders by the bigger buyers such as pipemakers or re-rollers, but market participants on the sidelines of a EUROMETAL and YISAD steel conference in Istanbul today said that traders are ready to sell in small lots and negotiating with smaller buyers for as low as 200t.

Although prices for such small deals would be somewhat higher, the differential is not as high as previously. Today Chinese HRC was heard available at $600-610/t cfr Turkey for Q195, and in some cases below — sources said that in the context of the sharp declines and large tonnages China is sending to Turkey, discounts of $5-10/t do not make much difference.

China’s increased presence is further disrupting the domestic Turkish market — large buyers have always had access to lower import prices, but domestic Turkish mills dominated the market for smaller and mid-sized buyers. Even for those buyers, the import duty — due to be applicable again from 1 May — still means that Chinese prices are more competitive. As a result, Turkish producers are having to slash offers further, but not able to find much demand now, amid the forthcoming elections.

Weakness out of China over the past few months has resulted in another new trend in the Turkish market — Turkish re-rollers have resorted to buying Asian-origin cold-rolled coils (CRC) and re-selling them in the domestic market in smaller lots. As a result, some of them now have two CRC prices — from own production and imported material for re-selling, which is offered at a large discount.

This week Turkish market participants expect that China’s selling spree might slow down soon, due to the production cuts, which Chinese mills are implementing, but prices so far are still slipping.

In the first two months of the year, imports of Chinese-origin flat steel in Turkey surged by 82pc on the year to nearly 250,000t. Imports have likely shot up after the earthquake, as Turkish prices increased rapidly, and as production at Isdemir stopped, while Chinese mills became increasingly more competitive.

By Lora Stoyanova