The merchant bar markets, which were expected to receive a boost in September, have not fulfilled these expectations. The static conditions in Europe have caused the export markets to decline, while the euro has reached an historical high against the US dollar.
The dollar-based prices are stable at the moment; however, the prices in TRY have been decreasing because of the decline of the $/TRY exchange rate. Despite the downward trend of the TRY prices, current demand is weak due to the calm market situation. As of this week, the price level of angles and flat bars segments are in a range of TRY 790-810/mt, excluding VAT. Due to the billet market's strong position compared to the longs market, the margins of the domestic producers have been tightening.
The Turkish producers have been continuing their sales for late October shipments. The price level of angles and flat bars segment are in a range of $650-680/mt FOB depending on size. The billet prices, as we have said, have been tightening the margins of the rolling mills. Also, the weak longs demand has been decreasing the rolling mills' demand for billets.
Turning to the European domestic markets, the Greek domestic market has been seen to be more lively compared to the other southern European countries. This week a €20/mt increase in merchant bar market prices is expected, as Greek local producers increased their rebar prices in past weeks.
There is no change in the Bulgarian domestic merchant bar prices. However, it cannot be said that the local market is strong. Demand is not quiet sluggish; however, there is a lack of activity at the moment.
Demand is stable in Spain and Italy. The producers in Italy have decreased the base price by €10/mt. The prices of160 mm IPE were quoted at €630/mt ex-warehouse excluding VAT in July, but decreased to €630/mt ex-warehouse excluding VAT as of September. Meanwhile, the price level of 180-200 mm IPE in the local Italian market is higher by approximately €10-15/mt than 160 mm IPE. A price increase is expected in Italy. Despite the fact that stocks in the Spanish domestic merchant bar market are not high currently and in spite of the continuing strong performance of the euro against the dollar, the Spanish traders and the dealers have not been keeping their import options warm.
The strong demand in the Far East markets, the rising prices of ex-China merchant bars caused by the high Chinese export taxes, as well as the increasing freight rates, have all meant that the price advantage of ex-China merchant bars no longer exists. This may cause Turkish producers to gain some advantage in Europe, North Africa and even in the Middle East.