POSCO enters Turkish HRC spot market
South Korean producers are now targeting to enter Turkey’s commercial HRC segment, which could tighten competition in Turkish domestic market and hit local mills’ positions.
South Korean HRC sellers used to concentrate mostly on sales to the Turkish automotive sector, but nowadays some of them, POSCO in particular, are aiming to strengthen their presence in Turkey’s commercial segment (traders, pipe-makers and re-rollers), which is relatively new for them. Their efforts have already been fruitful to certain extent as at least one large batch was sold to a re-roller in March at $425/t CFR, while local mills were standing at $430-440/t EXW/FCA. Currently, HRC offers ex-POSCO are around $400/t CFR vs. $405-420/t EXW/FCA locally. In addition, South Korean HRC is available for end-June delivery to Turkey, while Erdemir is mostly offering same delivery terms for domestic customers.
A new supplier, coming to Turkish spot market, will most probably have a direct impact on local HRC producers. On the one hand, they may lose a share of the domestic market, which appears to be hardly acceptable given the constantly shrinking export opportunities. “Tat Metal, Borcelik, Tezcan most probably will be their main buyers as POSCO offers HRC of an excellent quality,” a major trader told Metal Expert. As a result, local sales of Turkey’s Erdemir and Colakoglu Metalurji will most likely be affected as Habas is rarely dealing with re-rolling segment due to quality issues. On the other hand, even if South Korean suppliers are not able to take a decent market share from local mills, their activity will put additional pressure on domestic prices.
In 2014, Turkey imported 182,000 t of HRC ex-South Korea, while in January-February alone the number was 74,000 t.
Source: Metal Expert.