The stability of
scrap prices three weeks ago created the question whether the upward pricing trend in long product markets would continue or not. However, with the initiation of
scrap purchases by Turkish and Italian mills, prices in
Europe,
CIS and
Middle East continue rising.
CIS origin
wire rods and rebars have been offered in a price range of $400-405/mt FOB this week. Especially, West
Africa and
Middle East markets are active in
CIS origin
wire rod and
rebar purchases. Euro/US Dollar exchange rate being at 1,20-1,21 allows especially Ukrainian mills to compete against Italian mills in the Algerian
wire rod market.
Turkish
rebar offers, except for US and Gulf region, have been in a price range of $445-455/ton FOB on actual weight basis for late May/early June shipments. Sales to certain European countries have been concluded at levels closer to the high-end of this range, while sales to certain Middle Eastern countries have been concluded at levels closer to the low-end. Through the end of the week, offers have increased above $450/ton FOB. On the other hand, in
merchant bar market, except for the US market, offers for equal angles and flat bars have been $490-500/ton FOB and $500-510/ton FOB, respectively. Sources report that bookings have been concluded at these levels, and especially
Portugal,
Spain and Moroccan markets are currently active.
In local Spanish market, AENOR-certificated rebars of 20 mm dia are at Euro 500/ton delivered to customers' premises. (AENOR certificate is available for only Spanish producers and it is the only certificate that is to be taken for usage in governmental projects.) Prices have reached these levels following Euro 40/ton increase at the end of February. According to reports, Spanish mills are willing to increase their price by another Euro 20/ton at the end of March. On the other hand,
trading firms in
Spain are undecided about whether the projected price increase will be accepted in the market. Spanish
trading firms are not worried that import
rebar and
wire rod shipments will take place in June.
Trading firms, which think that domestic mills will face difficulty in summer in terms of supply, believe that shipments that will take place at the beginning of summer will create an advantageous position for them.
Wire rod offers given from
China to
Europe may distress European mills and the other exporting countries to
Europe. Chinese mills are trying to get orders for a minimum tonnage of 10,000 tons in their shipments to
Europe in an effort to keep
freight costs at reasonable levels. Moreover, since the earliest shipment dates are indicated as late June or early July, Chinese
wire rods are only brought by major importers, although Chinese
wire rod prices are lower than the prices of other exporting countries to
Europe and that of European local mills.
In Israeli market in the
Middle East, local prices are moving with the incessant rise in import
rebar and
billet prices. Import
rebar offers from
Turkey are currently at $465-470/ton CFR
Israel level. In the
UAE, one of the countries in the Gulf region, local
rebar prices have not increased enough, despite the pressure put by import goods. This situation keeps importers away from the market. Certain importers, which believe that import
rebar prices have increased significantly, are not active, thinking that market will soften.
As an overall evaluation, the fact that
scrap prices continue rising and that the market has started to talk about June shipments and purchases support those who predict that long product prices will retain their levels for a certain period. On the other hand, there are those who on the contrary claim that prices have reached the levels in golden year 2004 or even surpassed them. Moreover, they also claim that importers and local market players have built large inventories and the prices have reached peak levels.