Turkish HRC exports to Italy double

Turkish hot-rolled coil (HRC) exports to Italy more than doubled year on year in January-August, thanks to competitive offers and a contraction of domestic Italian supply given reduced production at Ilva.

Turkey exported 850,863t of HRC to Italy in January-August, up by 103pc from 417,275t a year earlier, data from the Turkish Statistics Institute show. Market participants attributed the increase to limited supply in Italy and Turkish offers becoming competitive as the lira extended its slide against the dollar.

Spain was the second largest recipient of Turkish HRC, taking 471,000t in the first eight months, up from 364,000t a year earlier.

Turkish HRC exports to the US increased by 120pc year on year, reaching 185,000t in January-August, despite having virtually stopped in May in the aftermath of the imposition of a 25pc tax by US authorities. But exports to the US virtually halted in September after the country's administration doubled the tariffs on Turkish steel exports on 10 August.

Overall, Turkey exported 2.44mn t HRC in the first eight months of this year, up by 35pc from the 1.80mn t shipped same period last year

But the weaker lira curbed shipments into the country, with HRC imports declining by 5pc year on year to 2.86mn t in January-August.

Imports from Russia fell to 1.16mn t in the first eight months of this year, down from 1.56mn t a year earlier. But imports from Ukraine increased to 417,000t, up from 251,000t during the same period of 2017. France was the third largest HRC supplier to Turkey, having exported 222,000t in January-August, but this was down from 280,000t exported a year earlier.

Market participants think Turkish HRC exports to Europe could continue to step up during the last quarter, especially if buyers turn to stockpiling ahead of EU quotas being filled, after which 25pc tariffs will kick in.

Two Turkish mills still have October-November shipment material available and their offers stand at $565-$570/t fob, which provides an attractive alternative to the domestic prices in Europe.

On the other hand, imports are likely to slide further as the lira remains weak, and domestic demand was muted because of high inflation and other economic problems.