Turkish HRC nearing bottom: Colakoglu chief

Turkish hot-rolled coil (HRC) pricing has nearly "touched the bottom", Colakoglu chief executive Ugur Dalbeler told Argus today on the sidelines of the World Steel General Assembly in Monterrey, Mexico.

"I think we have already almost touched the bottom. If not, we will be touching it very, very soon," Dalbeler said, suggesting improvement is expected in the final months of the current quarter.

Consumption in Europe's key export countries — mainly Italy, Spain and Portugal — remains subdued, while inventories still need to reduce, but production cuts should see the market balance out.

Meanwhile, the negative trend in the domestic Turkish market is expected to reverse in 2020, compared with this year, driven mainly by firm demand for flat steel.

"When you drop by 30pc, the next year you might have growth, but this doesn't mean it will be back to normal," Dalbeler said. "We have to bring inflation and interest rates down so construction activity will start again, but hoping more industrial activity is going to grow so flats will have a chance," he said.

The World Steel Association today released its latest short-term outlook, forecasting a 5pc increase in ex-EU European country steel demand, following several years of double-digit deceleration, which would be due largely to Turkey, the association said. Turkey is anticipated to post growth of 6pc in 2020.

Turkey remains one of the few large steel markets with limited trade protection measures, with as much as half of the HRC consumed domestically provided by imports, Dalbeler said, and more recently arriving from destinations as far away as Japan. "This is the true meaning of dumping. You have extra [and] you dispose of it without thinking of the price or impact on the market," he said.

Colakoglu expects southern Europe to remain its largest export market in 2020, along with northern Africa, despite safeguard measures in the EU and other destinations. The revised safeguard quotas in Europe, which were introduced on 1 October with a 30pc cap on any one country's import share, clearly target Turkish exporters, Dalbeler said.

Argus reported last week that Turkish imports of flat products are among the top concern for European steelmakers, which are pushing for a European Commission investigation into the country. "Our exports [to Europe] in Q2 have dropped significantly, but in return, we see exports into Turkey have doubled from Europe," Dalbeler said.

Europe has not treated Turkey fairly, he said, suggesting the continent "changed the rules" once Turkey actually started to export more than it was importing from Europe.