The Turkish flat steel market remained largely inactive last week, with recent price increases driven by rising costs, leaving producers little room to offer discounts to stimulate trade, market participants tell Kallanish.
The domestic market continues to be constrained by Türkiye’s economic conditions, with high inflation and elevated interest rates.
“Business is squeezed between two realities,” a market participant says.
“On the one hand, Türkiye’s economic situation is deteriorating - many companies have gone bankrupt and layoffs have increased significantly. This means domestic consumption is low and continues to decline. On the other hand, costs are rising across the board. Raw materials and labour costs are increasing day by day, so the price increases in the steel market are real. Mills have no choice but to raise prices and are trying to do so whenever possible.”
Rising scrap and imported flat steel prices have further reduced producers’ ability to offer discounts.
“With scrap prices at $370–375/tonne cfr and conversion costs around $180/t, the breakeven point is now above $550/t ex-works,” the source added.
Market participants noted that domestic buyers are waiting for interest rate cuts, which could support a recovery in local activity.
Domestic HRC prices are quoted at $560-575/t ex-works, with $560/t currently considered the floor. Availability remains limited, with Erdemir and Çolako?lu largely booking April production, while only small March volumes were available from Haba? as of Thursday, according to market trading sources. Most other producers are offering April delivery.
On the export side, sentiment remains uncertain. EU flat steel quotas are filling rapidly across product categories. Notably that material entering the market already reflects embedded CBAM costs. Some market participants expect the second quarter quotas to be filled quickly as well, as EU buyers build inventories ahead of the anticipated quota tightening and a possible increase in the out-of-quota tariff to 50%.
“The export side is really confusing. Nobody has clear visibility on CBAM costs, but EU customers are buying defensively in case safeguard tariffs rise to 50% and quotas are reduced in the second half of the year,” a source said.
“Europe is completely quiet, while the UK is partially active,” another participant said.
In the import segment, HRC offers were reported at $506-510/t cfr, with bids heard around $490-495/t cfr for March shipment. “The import flat steel market is silent,” a trader representing Chinese supply says.
Another supplier echoes this view, noting: “Demand [for imports flats steel] exists, but the gap between buyers’ expectations and available prices remains wide, so the market is waiting.”
Source:Kallanish
