Pressure on Turkish HRC pricing leads mills to plan maintenance breaks

Ongoing pressure on Turkish hot-rolled coil pricing due to slow demand has caused some producers, which have already reduced their usage capacity, to plan maintenance at their facilities in July, sources told S&P Global Commodity Insights June 23.

The market remained slow amid the approaching summer holidays, an executive of a major Turkish steel producer told S&P Global Commodity Insights, adding that his company would start “planned annual” maintenance works at its facility, but gave no further information about the start date and length.

Another Turkish HRC producer source said his company would also start a maintenance break soon, without mentioning the exact start date.

At least three HRC producers were planning to start maintenance works in July, a flat steel service center manager said, adding that some coated flat steel producers could also follow.

“A coated coil producer has already started maintenance work at one of its galvanizing lines,” he said.

Evaluating output

A coated coil producer manager said his company would be evaluating reducing its output in the coming weeks if the bearish sentiment in the market persisted. He was expecting Turkish HRC prices to soften below $700/mt EXW in the coming weeks.

The Platts Turkish weekly HRC assessment fell to $795/mt EXW June 17, according to S&P Global data, having fallen $400/mt since mid-March.

The fall was also in line with lower imported scrap prices, with the Platts Turkish imports of premium heavy melting scrap 1/2 (80:20) falling $15/mt day on day June 22 to $335/mt CFR, the lowest level since Nov. 20, 2020, according to S&P Global data.

Not mentioning prices

A pipe producer source said the market was so quiet that HRC producers had stopped mentioning any price in recent days.

“They are currently asking buyers’ bids, but demand remains low,” he noted.

Prices could continue to soften in the coming weeks amid uncertainties, a service center manager said.

Drawing attention to global recession concerns, the manager said there wasn’t any hope of a price recovery in the market because of low export demand.

“But if any protection measures for HRC imports will be announced in the coming weeks in line with expectations, this could provide some support to Turkish mills’ HRC pricing,” he said.

Industry sources told S&P Global June 16 that the Turkish Trade Ministry could announce the final decision on its antidumping investigation into HRC imports from the EU and South Korea in late June or early July.

— Cenk Can