Turkey’s CRC prices to go up further in Mar-Apr
----Interview with Ahmet Demirel, general manager of Dema Metal Ltd
- Dema Metal Ltd, a family owned company, has been founded as Alp Metal since 1973 for local market of Kayseri and now continues as Dema Metal for both international and national markets. It is a direct agent of Erdemir (the biggest steel mill in Turkey).
- Asian Metal: Mr Demirel, please give an introduction of your company.
- Demirel: Dema Ltd is an importer, stockholder and wholesaler of flat steel products such as Cold Rolled, Hot Rolled and Hot Dipped Galvanized. It is a family owned company founded in 1973 and now its trading volume is reaching 2,000 tons per month.
- To produce in parallel with non-stop development and growth in our target market, in accordance with performance and safety standards, able to meet requirements and expectations of our customers, we import both Prime and Secondary grade CRC, HRC and HGI from Russia, Ukraine and sell them to our end users. We sell materials to our customers according to their service requirements such as cutting to length, slitting, lazer cutting and so on. We are also regular buyer of Erdemir (the biggest steel mill in Turkey) and sell materials to our national and international customers. We also work as a contract manufacturer of steel products for European market. We can produce almost all parts for furniture and automobile industry.
- Asian Metal: Whether Turkey has become a self-sufficient country in steels in recent years?
- Demirel: Turkey used to import steels from Europe before 2008. After 2008 there were several Turkish mills being established and Turkey produced more flat steel products. Erdemir , Tosyali, Colakoglu , Tezcan , Tat Metal are bigger producers in Turkey. However, it has to import flat steel products under the development of international trading. As steel exporting countries were facing intense competition, imported steel products’ prices became relatively low. Turkey is importing materials from Europe, Russia, Ukraine and China.
- Asian Metal: How did CRC prices go in 2016? It seems that there were two turning points in the past year.
- Demirel: As you may remember, prices of CRC and HRC kept going up from January to May and fell back from May to September. The price of CRC reached the highest point at USD700/t in May and dropped to USD520/t in September. After that, the price began to continue on a general upward trend and it reached the current level of USD650/t.
- Asian Metal: We know that Turkey’s political situation was not stable in the second half of 2016. Whether the steel market was negatively influenced by this?
- Demirel: Yes, the steel market was greatly influenced by the political situation in Turkey in 2016. Due to the political instability, Turkish lira continued to depreciate from September, 2016 to January, 2017, which on a large scale restricted the economy from developing. As a consequence, the demand for steels in Turkey’s local market was very weak and its steels’ prices in the international market were lower than others’. We will have an election in April, 2017 and I think it will bring some new influence then.
- Asian Metal: Why did prices of CRC in Turkey move up and down fast recently?
- Demirel: On one hand, imported steel scrap prices continued to rebound and have totally recorded a mark-up of USD40-50/t in the recent month, supporting steel mills to increase prices. In addition, Turkey’s CRC export prices have been competitive in USA and Europe recently and steel mills are active in exporting business at present, causing low stocks in local market. These factors support prices rise. On the other hand, the demand from Turkey’s market remains weak owing to slow economic development, dragging prices down. Both of two sides are interwoven, causing prices going up and down.
- For the deep analysis, I think this is because of the economical instability all over the World. There are two big players in steel market. USA is the biggest player on the buying side and China is the biggest player in producer side. These two powerful countries dominate the international economy. When USA starts to buy materials, prices go up so fast and when China makes over-production and sells in international market on a large scale, prices drop all over the World.
- Asian Metal: China concluded fewer exporting deals in past two months due to sharp price rise, while Turkey export volume increased. Is that true? Do you think the two situations have relationship with each other?
- Demirel: I think there is limited relationship for this situation. China exports decreased because of higher pices and more international trade conflicts. Turkish mills try to export more materials because there has been not enough demand locally in the recent year. They have to try to sell materials outside Turkey.
- Asian Metal: Do you think CRC prices will continue to go up in March and April?
- Demirel: Yes. As steel mills increased export volume and distributors can hardly order enough materials from steel mills in the coming month. Traders are a little reluctant to sell materials at present. I think prices have chances to go up in the foreseeable future.
