Calm period in Mediterranean, Black Sea and Middle East rebar markets

Friday, 22 June 2007 14:44:36 (GMT+3)   |  
       

This week Turkish mills have offered rebars for export at $580-590/mt FOB on actual weight basis for late July/early August shipments to destinations other than the US and Persian Gulf markets. It would be difficult to describe the market as a very active one.  Due to the summer holidays, southern European buyers are not keen on placing orders now for materials which would arrive in August.

Following the Chinese government's announcement regarding the introduction of export duties, the expectation of a price rise emerged in the UAE market. Moreover, with this expectation, Turkish mills decided to increase their offers to this region to $625/mt CFR on theoretical weight basis, using the advantage of being the only player in this region. However, they were not able to achieve the expected price rises in the UAE market. Furthermore, the import rebar price in this market has declined to a level of AED 2,350/mt ($639/mt) delivered to site on a theoretical weight basis for 3- and 5-month deferred payment. Therefore, currently import activities are not very brisk.

Prices are following a downward trend in almost every region of southern Europe. Inventories seem to be high compared to the current level of demand. At present, the usual summer slowdown is observed in the European market.

In the local Italian market, base prices have retreated to a level of €280-290/mt. While the price of rebar in northern Italy is at €475/mt delivered to warehouse, export offers for Algeria are at €440/mt FOB. Although the Italians have an advantage over their Ukrainian rivals in this market due to the regression in the €/$ exchange rate, the high levels of inventory are slowing down the market.

Although there is no change in the list prices in the Spanish market, actual sales are being concluded at price levels lower than these. While base prices are at €330/mt delivered to warehouse, the price of AENOR-certificated rebars of 12 mm dia is at €550/mt. In Portugal, rebar prices have fallen slightly. In this market, the price of rebars of 12 mm dia is at €475/mt delivered to warehouse on 60-day deferred payment basis.

Ukrainian rebars have maintained their price level of the previous week for July production. Rebar offers are at $535-540/mt FOB for North Africa, at $560/mt FOB for West Africa and at $575-580/mt FOB for Eastern Europe and Russia. The high level of inventories in Algeria and the price advantage of the Italians have slowed down the activities of the Ukrainians in this market.

Generally speaking, the rebar market is not very active in the Mediterranean, Black Sea and the Middle East. The introduction of export duties in China has not yet had the expected effect on the market. In Europe, the usual summer slowdown is being seen with the high stock levels making the situation worse. Activity in the Russian rebar market is getting slower, while stock levels in North Africa are rising. The US market has not had the expected effect on the international rebar market this year. There is no positive expectation for June; however, the possibility of the US and Europe returning to the market for late August/early September shipments may revive the market after a long period of calm.


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