Turkish pipe producers struggle to conclude export deals

Turkish pipe producers are struggling to sell in the global market in the absence of European buyers.

Although European buyers still want to benefit from the strengthening euro, safeguard quotas prevent them from buying from Turkey. As a result, only a limited number of sales have been concluded to the European market this week. Demand from other markets has been insufficient to fill the gap left by the withdrawal of EU buyers.

Hot rolled coil prices, meanwhile, which increased to $500-510/tonne last week, have further risen to $515-525/t ex-works this week.

Turkish pipe producers are unable to reflect the increases seen in HRC prices to pipe prices, due to low demand.

Most offers for Turkish electric resistance welded (ERW) pipe made from S235 grade HRC have remained unchanged at $535-545/t fob Turkey theoretical weight this week. However, welded pipe offers at above $555/t fob are also available from some producers that have advantageous production costs or are booked for longer.

Some Turkish pipe producers have concluded sales to the UK this week, at $520-530/t fob theoretical weight. African buyers have continued concluding bookings from Turkey; however, sales quantities are too low at below 100 tonnes.

A Turkish pipe producer tells Kallanish: “We achieve the best profit margin in the European market. No other market gives us those margins as they buy thinner material. Our costs increase as the material gets thinner.”

Another producer says: “We are suffering from higher HRC prices. We have increased our prices by $50/t while our raw material costs increased $90/t. Insufficient demand is preventing us from increasing our prices at the same rate.”

Sales to Turkmenistan have continued this week, though sellers are worried about receiving payments. Israel is seen to have inquired about some material this week; however, their price expectations are at much below Turkey’s offer prices.