NEW YORK Steelmaker
Colakoglu Metalurji AS has established a Houston trading house,
making it the first Turkish mill to sell into the United States
from a domestic location.
The Houston office, which
expects to begin sales of hot-rolled coil and reinforcing bar
in early 2013, will sell mill direct to buyers across North
America, Jose F. Gasca, chief commercial officer of
Colakoglus Houston operations, told AMM.
"We opened an office in Houston.
Why Houston? Its a logistical advantage thats hard
to find in other places, in other states or in the continent,"
Gasca said. "The office isnt going to be only focused on
the U.S., but the entire continent." According to Gasca,
product from the Turkish steelmaking operations will be shipped
to Houston, and scrap metal and other raw materials will be
sent back to the mill on the same vessels.
"The idea is to coordinate the
purchase of raw materials for the mill, so were not only
buying scrap, but also slabs and billet. We like the idea of
having some coordination from here," Gasca said.
Gasca, who previously served as
managing director of Coutinho & Ferrostaal Inc. (C&F),
was with the Houston-based trading house for nine years and was
responsible for certain markets in Europe, the Middle East and
Asia for both flat and long products. He said he left C&F
in September 2011 to start his own company, X Steel USA LLC,
which he recently left to oversee Colakoglus Houston
decision to establish a Houston trading office comes at a time
when more foreign mills are setting up their own domestic
offices, a move that some say can effectively cut out the
middle manthe steel trader. Some traders told
AMM the trend was a concerning one, because importers
already squeezed by tight margins could lose opportunities to
import from certain overseas suppliers if the mills set up shop
But Gasca denied rumors that
Colakoglus Houston office could disrupt trading
"I think I understand well the
irreplaceable role of a trader. Traders offer many advantages,
lots of market knowledge and lots of logistical synergies that
are difficult to develop from one day to another," he said. "We
think our role is to complement markets and provide better
customer service by being close to customers and our
Others expressed concern that
the move comes at a time when the U.S. long and flat products
markets are characterized by oversupply and weak demand,
leaving some wondering how a new player could change the
But with the Houston office
focused more on sourcing raw materials than selling steel
products, Gasca said, he does not expect the new operation to
have a significant impact on the market fundamentals.
The Houston office, which is set
up but not yet selling, is focusing through year-end on
verifying to would-be customers the quality of product from the
Turkish mill, as well as developing logistics and financing
"Were trying to monitor
international markets for the behavior of scrap, slabs and
billets," Gasca added. "Were not really in a rush to
start selling or to start buying aggressively, and thats
not our objective."