Merchant bar prices, which have been skyrocketing for the past two weeks in the global markets, have been softening in the local Turkish market on a TRY basis due to the fluctuations in the US$/TRY exchange rate. However, no revival has been observed in the local demand level in Turkey. Construction and engineering companies, which register higher consumption of merchant bars than of flat products, have chosen not to purchase material due to the increasing prices; however, they are also wondering with some concern how high price levels will climb.
The merchant bar producers in southern European countries such as Italy, Spain and Greece, which have been experiencing sluggishness in their local markets, have been mentioning that the increases in raw material prices are setting the current price levels, not the producers themselves. They also add that they are obliged to reflect these increases in their price levels. In line with such statements, all countries which have been influenced by the raw material increases, including Turkey, have been raising their prices in spite of the low demand and the reactions from end-users. The latter, finding it difficult to give meaning to the price levels in the local southern European markets, are following the export market price levels with close interest in a bid to understand how the local market prices will change in the future. As a result of the increasing base prices, the price levels of merchant bars of 140 mm and below in Italy are this week at €740-785/mt ($1,132-1,201/mt) ex-works, on actual weight basis and excluding VAT. In the local Spanish market, the price levels of the merchant bars of 160 mm and below are at €790-825/mt ($1,209-1,262/mt) and IPN-UPN and IPE prices are at €940-980/mt ($1,438-1,499/mt); both are ex-works, on actual weight basis and excluding VAT. Meanwhile, the price levels of angles in the local Greek market are at €760-770/mt ($1,163-1,178/mt) ex-warehouse, excluding VAT, and on actual weight basis.
Following the rapid increases in the local Turkish market towards the middle of last week, the Turkish merchant bar producers were struggling at that time to set a constant price level. With the billet price level of $1,150/mt being pushed these days, the merchant bar prices in the local Turkish market this week, depending on size, thickness and region, are at the following levels: small IPN-UPN are priced at TRY 1,480-1,530/mt ($1,170-1,210/mt), 100-120 mm IPE are at TRY 1,540-1,575/mt ($1,217-1,245/mt), angles are at TRY 1,480-1,515/mt ($1,171-1,198/mt) and flat bars and square bars are at TRY 1,500-1,530/mt ($1,186-1,210/mt) - all prices are ex-works, on actual weight basis and excluding VAT. The prices also may differ in the sales price levels of traders (with previously-taken positions) which are lower than the mills' levels.
Following the recent increases, we will see more clearly in the upcoming days how end-user demand will change.