Turkish hot rolled coil exporters have increased offers on higher input costs and healthy rolling books. They have been supported by the return of Chinese importers and gradual demand recovery in the Middle East and North Africa. 

But sales remain scarce, as Turkey's major export market, the EU, remains inward looking, and those willing to import are unable to commit to new, higher offers, Kallanish hears from market sources.

One predominantly domestic market-serving integrated supplier says there were no export sales in the past week, but negotiations are proceeding with Middle Eastern buyers. Offers stand at not below $430/tonne fob Turkey base for 2mm material. Demand in MENA is confirmed to be recovering, with Algeria and Saudi Arabia actively in the market sourcing material. The mill notes sales are currently negotiated for small tonnages only.

Turkish HRC is a highly workable alternative to European and CIS material in MENA, as the former has no offers with suitable lead times, and the latter is out of the market currently. The mill notes it is not offering to Europe, and intends to concentrate on non-European exports for at least nine months, or possibly longer.

European demand for imported material remains slack, as domestic mills are pushing for September-rolling bookings at August prices of around €400/t ($458/t) delivered, for large orders, sources note. Bookings of Turkish HRC at these prices are complicated by quotas, and EU buyers are opting to book domestic material, whenever they can, one trader says.

Southern European traders were nevertheless making enquiries last week to another Turkish mill, which still has domestic HRC allocations, for up to 20,000-tonne volumes for Italy and Greece.

In addition, Chinese and Southeast Asian HRC import price growth has re-opened the arbitrage for Turkish HRC exporters, but with a caveat. Traders estimate Turkish mills would have to sacrifice on price in order to shift large volumes, which is the regular practice, they say.

A 40,000t HRC cargo will cost around $40/t to ship to Asia, netting back, at current bids of $460-465/t cfr depending on the country, to $420-425/t fob Turkey. Traders opine Turkish mills may want to wait a little longer before booking in order to make the most of what is perceived as an at least month-long arbitrage window. No new Asian sales were reported last week.